Strengthening the American Economy: Promoting Growth, Opportunity, and Prosperity

Well, good morning, members, guests, our witnesses. Welcome to our hearing today. Committee on Financial Services will come to order. And without objection, the chair is authorized to declare recess of the committee at any time. Today's hearing is entitled "Strengthening the America's Economy, Promoting Growth, Opportunity and Prosperity. Without objection, all members will have five legislative days within which to submit extraneous materials to the chair for inclusion in the record. I now recognize myself for five minutes for an opening statement. This committee's mission is to ensure that our financial system remains a source of opportunity and prosperity for the American people, a real beacon for the economic freedom that we've celebrated for two hundred and fifty years. That means helping families buy that first home, supporting small businesses, empowering our community banks and credit unions, and letting investors put their capital to work. For years, families and small businesses have felt the effects of Washington's failures. Runaway inflation, except excessive spending, punitive regulation, all have made it harder for Americans to save and invest, to buy a home, start a business, or access capital. Under the previous administration, families heard a lot about affordability but never saw it. And under President Trump, that is now changing. Our economy is the strongest when government creates the conditions for growth, not barriers to growth. Through our efforts through budget reconciliation, we have tackled increasing uh, real take-home pay for our working families, encouraged capital investment while prioritizing federal spending and reducing waste, fraud, and abuse. To complement those important successful policies, today's hearing examines the economic impact of House Republicans' and the Trump Administration's financial services policies and regulatory reform efforts. We'll also examine the ways this agenda is delivering on affordability compared to the last administration's promised attempt but failure to deliver. Since President Trump took office, this administration has resumed its focus on investment and innovation, moving quickly to replace the regulatory uncertainty of the past four years with more clear rules and common sense. That greater clarity has strengthened confidence in our markets and reinforced the resilience of our financial system. But regulatory action alone is not enough to fix what was broken. Committee Republicans are working diligently to codify these reforms to make them permanent and more predictable. Committee Republicans have put in the hard work to advance bills, strengthening our capital markets, modernizing regulation, expanding housing supply, and supporting community financial institutions, all while promoting American leadership and financial innovation. Most notable, during the hundred and nineteenth Congress, we've seen the twenty-first century Road to Housing Act and the Genius Act, And the House has also passed the Main Street Capital Access Act, the Invest Act, and our digital market framework, the Clarity Act. What's more is that the committee of Republicans did all this work on a bipartisan basis with those of our democratic colleagues, who saw the need for common sense reforms to empower American families, small businesses, and community banks and credit unions that serve all Americans in all of our states. These accomplishments demonstrate the bipartisan victory of this pro-growth agenda. They mean that all across our country, small businesses will get the capital they need to grow and create more jobs, families will become homeowners, and community banks and credit unions will have flexibility to say yes to more borrowers. These are not abstract policy wins. They are the building blocks of a stronger, our stronger communities across our nation, greater opportunities for economic freedom and advancement for our families, and a more prosperous economy. We must continue to advance policies that promote investment, encourage responsible innovation, and ensure that America's financial system remains the strongest and most competitive in the world. I look forward to our witness testimony today, the conversation and questions of our colleagues, and I yield back. I now want to recognize the ranking member of the committee, Mrs. Waters, for five minutes.

Uh, thank you very much, Mister Chairman. Um, I really should be very angry about what is happening in this country and with this economy, but I'm not. Uh, because now I know that the American people have really s- began to understand why, where it's coming from, and not only what is happening to them, Uh, but the fact that it seems that very few on the opposite side of the aisle are willing to fight stand up to the president and represent the people uh, Mister Chairman, after nearly two years of helping Donald Trump and his administration create the very affordability crisis families are facing today Republicans now wanna hold a hearing about it well Democrats will not let you sweep your abysmal record under the rug or pretend you had nothing to do with this mess. So since Republicans have finally decided they wanna talk about affordability, come on, let's talk. Let's start with the Republicans' complete failure to rein in Trump's pointless and costly wars which have poured gasoline on this affordability crisis. When Trump launched his rec reckless and endless war with Iran, Republicans did nothing to stop him. Oil prices soared. Diesel shot above five dollars and sixty cents a gallon. And American families got stuck with the bill. Every farmer running equipment, every trucker delivering goods, every small business moving products, and every family buying groceries is paying the price. Families have been squeezed so badly that they are taking out loans just to eat. nearly one third of users of banal, pay later loans, a form of short-term lending, are using the loans for groceries, and nearly half of those consumers say it is the only way they can afford the purchase. Yet, at the very moment, families are becoming more dependent on these loans. Trump and his team are gutting the Consumer Financial Protection Bureau, including stopping protecting BN PL consumers from predator practices. Trump's administration has waged a relentless campaign to cripple the CFPB, the federal watchdog protecting Americans from scams, predator practices, abusive debt collection, and costly credit reporting errors. Republicans have even overturned a rule that would have removed an estimated four billion dollars in medical debt from the credit reports of fifteen million Americans. And yesterday, every Republican on this committee sponsored a bill to make Trump's attack on the CFP be permanent. Meanwhile, market rates have climbed back up to six point seven percent. Home sales are falling. And home ownership is slipping further out of the reach. Americans are delaying buying homes and building wealth because they simply cannot afford to get ahead under this administration. But not everyone is struggling, not everybody. The Trump family is now worth roughly one hundred billion dollars, fueled by crypto schemes, cashing in while Trump occupies the White House. Trump, who failed at running an actual uh casino, is making gambling great again. through prediction markets. His son, Don Junior, has financial interest in both prediction market platforms, uh, CalShe and PolyMarkets, which have become safe places for insider trading, tied to Trump administration actions. Trump is also selling early access to his market, moving social media posts for one hundred thousand dollars given Wall Street information before the public. Despite knowing all of this, Republicans are trying to jam through sweeping crypto legislation without any safeguards to stop the Trump family from proficing of the crypto industry and his administ that his administration regulates. Where are the Republicans' investigations? Where is the outrage from the party that says they love law and order, even though Congress passed Corporate Transparency Act to stop fraudsters from hiding behind shell companies? Trump unilaterally and unlawfully gutted it, and Republicans stuck their heads in the sand. Committed Democrats are actually doing the work to lower costs, including delivering the most significant housing legislation in decades to build more homes and expand home ownership. Uh, the chairman talked about bipartisanship, that's the only bipartisanship we can point to, and we did that. Trump called it a big yawn. and could not even be bothered to sign.

Government's time has expired.

I yield back the balance of my time, but I got more to say.

The the the committee knows that and understands it and looks forward to it.

Thank you.

Uh, Matt and Reiki, remember, I'd like to recognize myself for a point of personal privilege before we get started today. I wanna thank a long-standing staffer who's helped, uh, on the majority side of the aisle, uh, work so diligently for a long time, and that's to thank Zach Gates for his service to the committee and our members. This is Zach's This is Zach's last hearing with the committee after ten years of service on Capitol Hill. Zach has been a dedicated staffer running our subcommittee on capital markets under the leadership of our subcommittee chair Anne Wagner of Saint Louis, his true boss. He's been a fearless fighter for our Invest Act, which saw a strong bipartisan vote of three hundred and two, with eighty-seven Democrats supporting that measure on the House floor, as well as tackling these capital formation issues with a fresh perspective. I wanna thank you, Zach, uh, I wanna thank Ann Wagner for uh, recruiting, training, and uh, um, loaning Zach to the committee for his work, and I would like to yield just a moment to my friend from St. Louis,

Yeah, I I didn't just, you know, learn him up and and and pass him on here. I raised this young man. I brought He's he hails from St. Louis, Missouri, from my hometown. He went to MICDS. I brought him up here as a very, very, very young staff assistant. He quickly excelled in all areas, uh became my key point person on financial services, And then just in the last year moved to the full staff of financial services as Cap Markets um staff director. So I'm I'm just can't say enough wonderful things about about Zach, his family, the great hometown, and and uh and his first boss that raised him up here. So uh uh you're you're always team Wagner, Zach, don't ever forget it. And um I'm grateful to you and we wish you all, all the very best. Thank you, Mr. Chairman. I yield back.

I I thank the gentle uh woman from uh Missouri and I'm proud, Zach, of the spirit of St. Louis that you both share. Wish you well in your future endeavors and you'll always be welcome back at Financial Services. I yield back. Today we welcome the testimony of the Honorable Heath Tarbutt, President of Circle, and the former Chairman of the Commodity Futures Trading Commission. The Honorable Kathleen Kraninger, President, CEO of the Florida Bankers Association, and a former Director of the Consumer Financial Protection Bureau. Miss Lynn Martin, President of the New York Stock Exchange, Mister Alec Pollack, Senior Fellow at the Mises Institute, and Professor Derek Hamilton, a University Professor of Economics and Founding Director of the Institute of Race, Power and Political Economy at the New School. We thank each of you t- for taking time to be with us today. We look forward to your testimony. We'll be recognized for five minutes. Without objection, your written statements will be made part of the record. And, Mister Tarbut, we'll start with you, you're recognized for five minutes.

Chairman Hill, Ranking Member Waters, and members of the committee, thank you for the opportunity to testify today. I'm President of Circle, and our mission is to raise economic prosperity through the frictionless exchange of value. I've also chaired the CFTC and worked at Treasury. These roles have taught me two things. Innovation that outruns trust doesn't last. And financial plumbing really matters. American markets are the deepest and most trusted in the world. Today's question is straightforward. Will they run on American rails or someone else's? That question matters to every American family and business. The dollar is the bedrock of the global economy. Its reserve status yields more than just prestige. It makes mortgages, car loans, and groceries more affordable. It also funds the world's strongest military. Protecting that foundation requires dollar statecraft. That doesn't mean monetary policy or sanctions. It means keeping the dollar the world's first choice. Get this right, and borrowing costs stay low. American economic leadership endures. Get it wrong, and we lose ground. Neither dominance nor decline is destined. It's a choice. Three points underscore the urgency. First, The dollar's global role is an asset, not a birthright. We earned it, we can also spend it down. In the late nineteen nineties, the dollar held over seventy percent of reserves. Today it holds roughly fifty-seven percent. That's a steep drop in one generation. Experts debate the causes, but not the direction. We must act before the slide becomes irreversible. Second, The financial system's plumbing is changing. Companies are rebuilding it in software right now. At Circle, we call it the internet financial system, and we're helping build its foundation. Think of it as the internet for money, but soon for stocks, bonds, and other assets. It's on, fast, always on, and settles in seconds, not days. Private firms are building this payment layer worldwide. They're choosing the dollar as the default currency, because it's trusted, liquid, and available. We can't take that for granted. A system can be denominated in dollars, yet governed by another country. That is the strategic risk. American leadership means markets answer to American disclosure rules. Custodians answer to American examiners. American law decides what's final. And this committee can hold people accountable. None of that is guaranteed by dollars alone. Third and finally, the time for choosing is now. AI is the accelerant. Two years ago, the agentic economy was just a concept. Today, software agents transact on behalf of people and businesses. They don't stop for nights, weekends, or holidays. They need rails that are fast, programmable, and always on. The internet financial system is built for this. And whoever builds those rails writes the rules. They should be American rails and American rules. Congress has taken a crucial first step. The Genius Act was a bipartisan victory. It set American standards and consumer protections for payment stable coins. I encourage its faithful implementation. And I urge Congress and regulators to close every avenue for evasion. But winning the dollar layer of the internet isn't enough. The Clarity Act finishes the job. It sets the rules for the markets built on top. The House passed it. The Senate is close. Please send it to the President on a bipartisan basis. America built the dollar's position. We can build on it, or we can squander it. That choice will echo for generations. That's what dollar statecraft means. It's not a currency defended by proclamation. It's a financial system that runs on American law and keeps the American economy running. The outcome depends on more than just this committee, but your choices are essential. I'm therefore grateful to be here today, and I look forward to your questions. Thank you.

Thank you, sir. Miss Craninger, you're now recognized for five minutes for your oral presentation.

Chairman Hill, Ranking Member Waters, members of the committee, thank you for the opportunity to testify on behalf of Florida's bankers and the important work they do supporting our great state's families, farmers, businesses, and communities. America's diverse banking system is a strategic national asset. Community banks bring local knowledge and decision-making. Midsize and regional banks finance growing companies and larger institutions connect businesses to national and global markets. Together, banks safeguard deposits, move payments, and turn savings into the credit that creates jobs and opportunity. Yet years of duplicative, one-size-fits-all regulation have strained that diversity, especially for smaller banks, where compliance costs consume resources that should support lending, technology, fraud prevention, and customer service. Over the past eighteen months, Congress and the administration have delivered tangible results to right-size and update that regulation. Smart regulation brings clear modern rules, consistent examinations, timely decisions, and requirements calibrated to an institution's size, complexity, and business model. Smart regulation is not an end in itself, but a major driver that promotes growth, opportunity, and prosperity for the American people. Several principles guide the regulatory right-sizing focus. First, supervision should concentrate on material financial risks and violations of law. Second, regulation should be tailored so that well-managed community bank is not treated like a complex global institution. Third, agencies should coordinate, speak clearly, and act on predictable timelines. And last, Congress and the regulators need to review and recalibrate regulations to ensure they keep pace with today's economy. To that end, I commend the leadership of this committee and the members of this committee for doing that work including through the passage of the bipartisan twenty-first Century Road to Housing Act. In addition to much needed housing supply reforms, it directs attention to practical community bank issues, including streamlining de novo applications, improving coordination, addressing custodial and reciprocal deposit treatment, and providing examination cycle relief for certain banks up to six billion dollars in assets. I also want to recognize the leadership of this committee in achieving house passage of the bipartisan Main Street capital access bill. Seeing that bill become law would make a measurable difference in modernizing regulatory requirements and reducing unnecessary burdens that just take time away from better serving customers. The banking regulators have done substantial work to prioritize and tackle meaningful reforms. Issuing regulations to define unsafe and unsound practices and matters requiring attention. Simplifying community bank capital and reporting requirements. Issuing proposals on camel's ratings. Revising the rule implementing section ten seventy-one. Addressing regulation O comprehensively for the first time since nineteen seventy-nine. And more. Collectively these actions make regulation more proportionate, predictable, coordinated, and focused on actual risk, while preserving safety, soundness, and consumer protection. A healthy bank healthy banking system also needs new entrants and responsible innovation. Florida is again leading the nation in de novo bank formation, and we welcome the reforms in road to housing and the actions by the FDIC and OCC to streamline the process and provide predictable timelines. These reforms respond directly to organizers who must raise capital, recruit executives, contract with vendors, and build compliance systems before knowing whether an application will be approved. Innovation is essential to meeting customer expectations, lowering costs, strengthening fraud controls, and competing in a diverse marketplace. Recent actions by the regulators provide clearer pathways for banks to appropriately engage. Further, the Genius Act framework demonstrates that Congress and the agencies can establish guardrails without closing the banking system to new technology. Banks of all sizes need workable access, directly or through trusted providers, so innovation does not come solely from outside the regulatory perimeter. When a r well-run bank knows the standard, receives a timely answer, and can rely on consistent supervision, it can put more capital and talent to work for its community. That is how we preserve safety and soundness, strengthen competition, expand opportunity, and make community banking great again. Thank you. I look forward to your questions.

Thank you. Miss Martin, you're now recognized for five minutes for your oral presentation.

Chairman Hill, ranking member w- member waters, and distinguished members of this committee. Thank you so much for the opportunity to appear before you today. My name is Lynn Martin. I'm the president of NYSE group, which includes the New York Stock Exchange. I wanna use my time this morning to focus on three things. Why public markets matter to every single American, the state of our great nation's capital markets, and where NYSE is leading into the future with a deliberate focus on responsible innovation. Now let me start with why the public markets matter, not just to Wall Street, but to Main Street. When a company goes public on the New York Stock Exchange, it extends an invitation to every American with a brokerage account, a four O one K, a pension plan, or any other investment. account to share in its upside. And yet over the past three decades, the number of US-listed public companies has fallen by roughly forty percent. During that time, the best growth years of the most innovative companies were increasingly reserved for wealthy individuals and institutions who were able to invest in private rounds while teachers, nurses, firefighters, and everyday Americans who were saving for retirement were locked out from that opportunity. Reversing that trend is not just an economic priority, it's a matter of economic fairness. The good news is as I sit here today, the IPO markets of twenty twenty-six are telling a very different story. This story is a compelling one about the health. and vitality of the US economy. Global IPO proceeds in the first half of twenty twenty six have tripled year on year, from roughly fifty eight billion dollars raised previously to a record a hundred seventy eight billion dollars raised in the first half of twenty twenty six. Further, the S and P five hundred has closed at record highs twenty-five times this year, which is not paper gains. It's the collective judgment of millions of investors that American companies remain sound, innovative, and worth owning. This momentum reflects real policy progress. The SEC has moved with vision and urgency to reduce unnecessary burdens on public companies. The bipartisan Invest Act and the Genius Act have sent a powerful signal globally that the United States is committed to leading in capital formation and the digital economy. The NYSE is extremely grateful to this committee for its essential role in furthering that progress. Finally, I want to speak to innovation. The United States is leading the world when it comes to the future of finance, and the NYSE is leaning into that moment. We are building a tokenized platform that will bring the innovation and efficiency of blockchain technology to the trading and settlement of real world assets. Our platform will directly link the digital equities to underlying shares, so the tokenized instrument and the traditional equity are not two separate products, but a single security, broadly accessible in two forms. That design principle matters enormously because it prevents in- innovation and investor protection from being in tension. As the SEC and CFTC develop frameworks for innovative new products, we urge one non-negotiable principle. consistent treatment regardless of incumbency status or primary regulator. Similar products cannot be treated differently under the guise of innovation. Allow me to close with this. America's public markets today work because they are built on a bedrock of trust. Trust that markets are transparent, rules are applied consistently, and that every investor whether managing a billion dollar pension fund or investing a first paycheck has a fair shot in participating in the growth of the American economy. With continued support from Washington, we can remove barriers from going public, expand the circle of investors who share in high growth opportunities, and send a message to the world that the US remains the preeminent destination for capital formation and intends to stay that way. We at the New York Stock Exchange will continue to do everything in our power to ensure that the next chapter of the American story is as vibrant and inclusive as the one we are writing now. Thank you for your time, and I welcome your questions.

Thank you. Thank you very much. Uh, Mr. Pollack, welcome to the committee, you're recognized for five minutes.

Thank you, Mister Chairman, Ranking Member Waters, and members of the committee for the opportunity to focus on the affordability of housing in the twenty-first century Road to Housing Act. Uh, this is a truly bipartisan combination of actions, uh, to address affordability, reflecting years of bipartisan bicameral collaboration, as Chairman Hill has said, not to mention the art of compromise. This is manifest in the impressive voting majorities it garnered in both houses. With a strategy to reduce regulatory costs and increase housing supply, this act favorably contrasts with many past efforts to expand the subsidized financing of houses to increase demand, for example by expanding Fannie Mae and Freddie Mac, or the Federal Reserve's purchases of mortgage-backed securities. Such efforts unfortunately get capitalized into home prices in sellers' markets, pushing the prices ever higher. We're living with this effect right now in the second house price bubble of the twenty-first century. Especially notable among the acts reforms is reduction of burdensome, costly or outmoded re regulations. Uh, it appears from my expert uh advisors that the manufactured housing provisions in particular are promising here. Jared Bernstein, Chairman of the Council of Economic Advisors under President Biden, and Jim Perrin, a senior housing advisor in the Obama administration, have written, quote, the law will break through a lot of the regulatory sludge holding back the construction industry, unquote. It's certainly good for Congress to review and update, as this act does, outmoded regulations. I was very glad to see the community bank provisions of the act. The community banking sector is one of the distinguishing characteristics of the American financial system, giving it local presence and dispersed Credit decisions. Helping maintain the viability of the sector is a key goal, including as the act does, encouraging the chartering of new banks. The act also helpfully mandates studies to improve the availability of small residential mortgages, of under a hundred thousand dollars, although previous generations would certainly have been surprised, that we think a hundred thousand dollars is a small mortgage. Uh, I well remember discovering while at the home loan bank, how the credit quality of residential mortgages made by local community banks and savings institutions was systematically better than the market averages. And my view is that it would be better for the housing finance system to have the holding of mortgage credit risk widely diversified among com- community banks and other lenders across the country. Than to have it concentrated and Fanny and Freddie, two giants on the shores of the Potomac. Uh, title ten, prohibiting purchases of houses by large institutional investors is certainly the most controversial part of the act. The house and this committee made it significantly less controversial by making clear the continuing key role of institutional investors in the provision of houses for rental markets. through the various programs detailed in section ten O one A two. Title eleven of the act prohibits the Federal Reserve from creating a central bank digital currency, or CBDC, through twenty thirty, adding that any decision to issue a CBDC would require authorization by an act of Congress. In my opinion, this is an excellent provision. Having a CBDC would make the Fed an overwhelming politicized credit allocator, on top of giving the government oppressive potential for spying on American citizens. I believe title eleven of the act is an exemplary model of the Congress exercising its constitutional article one, money power, in ensuring the accountability of the Federal Reserve to the elected representatives of the people. Finally, uh, in the addendum to my written testimony, I consider the wider context of house prices and their trends, the role of the Federal Reserve in driving these prices up, and the outlook for house prices to fall as we go forward, as well as the possibility of residential mortgage defeasance to help address housing lock-in problems. I'd be happy during the discussion to take questions on any of the above. Thank you.

Chipolite, thank you very much. Professor Hamilton, welcome back. You're now recognized for five minutes for your oral presentation.

Thank you. Good morning, Chairman Hill, Ranking Member Waters, and the honorable members of the House Committee on Financial Services. My name is Derrick Hamilton. I serve as the Henry Cohen University Professor of Economics and the Founding Director of the Institute on Race, Power and Political Economy at the New School, and I also s- proudly serve as the Chief Economist for the AFL CIO. Over the course of the past year, our economic health, as measured by employment, affordability and economic inclusion, has trended down. We've experienced job losses, particularly in manufacturing, education and government sector, government services, sectors that have backward and forward linkages that reverberate throughout our economy. Inflation continues to outpace wages, And the labor share of our national income is as low as it's ever been since World War Two, and when we were tracking the data. By contrast, corporate profits, particularly in finance, continue to break records and reach new heights. Whether it's an affordability crisis, a debt crisis, a tax loan, the economic right to collectively bargain, incoherent trade policy, employment threats, and displacement from AI and data technologies, Our now infamous case-shaped economy with stark and divergent paths of consumption, income, and wealth between high-income Americans and everyone else. These vulnerabilities are the results of a tax code, fiscal and monetary policy, and regulatory economic environment that has over-indexed on profit and speculation, and under-indexed on investments in the American people. These conditions are not happenstance. They are the result of policies that concentrate capital and power, policies that prioritize speculation and profit over productive investments and policies that treat people as costs to be contained or managed. Our public infrastructure should first and foremost invest in American people.

Mm.

When properly resourced, people are innovative and productive agents that make dynamic contributions, that benefit themselves, their communities, and the economy overall. This should be the purpose of our economy. Authentic freedom and economic agency requires resources. These resources include housing, health care, banking and financial services, reproductive autonomy and agency with regards to family formation, rights to unionize and collectively bargain, good jobs, a capital foundation, access to quality education, all the way through college and the free mobility throughout society without the threat of detention or bodily harm from a state sanctioned terror because one's identity is linked to a stigmatized group. One last point before closing. As we grapple with concerns of an emergent economic speculative bubble, exemplified by exceedingly high valuations, particularly in the domains of AI and data technologies, The lessons from the great recession should have taught us that now is especially not the time to relax prudent regulatory controls and consumer protections. We should not be promoting increased financial leveraging and relaxing oversight and regulation of financial or data technology firms. Instead, we should be strengthening, not dismantling, the power and personnel of the Consumer Financial Protection Bureau. It was a lack of federal oversight, emphasis on deregulation, overspeculation, and in some cases outright fraud that caused the Great Depression. It was not caused by some grand profligacy on the part of the American people. Yet, the American people were left holding the proverbial bag, and likewise suffered the greatest economic pain from that recession for years to come. With that, I thank you and look forward to the Q and A.

Uh, thank you, sir. We'll turn to member questions now. I recognize myself for five minutes for questioning. In July, Congress passed the twenty-first century Road to Housing Act, and it became law, and demonstrated uh strong bipartisanship and years of work uh on housing policy and tackling housing affordability head-on by the members on both sides of the capital. The law now gives communities with the tools they need to tackle increasing housing supply, improving permitting efficiency, and supporting innovation in housing construction for both rural areas in our state as well as urban. Mister Pollack, let me start with you. Uh, you made a good distinction between demand stimulus, which federal policy frequently attempts to do, meaning driving up the demand for a house and yet all that does is drive up price, when you don't have an economy growth in supply. Thought you made that point clearly. Um, why do you think this is how does this bill tackle that supply issue? Uh, i- it's obviously harder to do. It's not as um, maybe the bells and whistles of like promoting demand. Can you, you wanna spend a minute and talk more about that.

Thank you, Chairman. Yes, as I said, the uh the bill has a different strategy, a supply and lowering of cost uh strategy, which is completely different from pushing a credit at a supply which drives up the prices, as for example was done uh notably by the Federal Reserve's suppression of mortgage interest rates. Uh, that had a cost to the Fed and to the government of about four hundred billion dollars, uh, and g- and stuck us with extremely, uh, high prices that are far over the top of the previous bubble peak. I- instead, this bill tries to induce, and I - I ho- uh, think we got a good chance of success here, more vibrant markets. The answer isn't for the government to build the houses, it's to It's to allow and uh set the uh environment for vibrant uh low-cost um uh market action to c- to create supply. And uh it seems to me a very a very uh good strategy, Mister Chairman.

Uh, uh, thank you, um, and likewise we had some key provisions that uh, Miss Craninger, you referenced in the housing bill that are targeted at our smaller most entrepreneurial community banks and as I've said public many times. What is the connection? Again, it's a supply focus. You have to have financing to construct that supply and our banks under ten billion dollars in this country make six out of ten home construction loans. But as you looked at this bill and the Main Street Capital Access Act, which had fifty-six Democrats join the uh, House majority to pass that bill also in July, can you talk about the impact on institutions in Florida by the combination of the priorities in both these?

Absolutely. Thank you, Mister Chairman, and thank you to all the members of this committee who really helped push that legislation and and hope to see the Main Street Capital Access bill actually become law um it is hugely important uh one of the things that surprised me when I moved to Florida was that many of the community banks really were not engaged at least in the mortgage financing side as you point out they're very engaged in the supply side uh in terms of construction loans um some of the larger projects around affordable housing projects and partnerships with non-profits and with the public sector to try to address affordable housing issues. But understanding the whole ecosystem and and really uh making a difference there, it does make a difference. And as you pointed out, the financing side of of the housing space, banks play a very critical role. And understanding locally, particularly rural areas, again not something Florida's necessarily known for, but we have quite a bit of agriculture in the center of the state. And the community banks serving those areas are important as well to improving the housing situation in those parts of the state. We've got growth everywhere in the state of Florida. And so the banks there, really giving them the opportunity to participate in a meaningful way, taking some of the burden away, and even promoting de novo formation, which I know we'll keep talking about. All of those things are gonna make a difference.

Thank you very much. Uh, Miss Martin, congratulations on uh, uh, the New York stock exchange's long history in the United States, here we are in America's two hundred and fiftieth anniversary as well, and the passage of the Invest Act led by uh Chair Wagner was important for this next generation of American companies and we tried this bill and you're gonna I'm gonna have to ask you to respond, in writing two pieces, one, broadening more access to private investing for individual uh investors in this country and expanding the ability to raise uh capital through our public markets. So if you'd respond uh your favorite aspects of the Invest Act in writing, I would appreciate it and I yield back. I now recognize the ranking member of the committee, Miss Waters, for five minutes of questions.

Uh, thank you very much, Mr. Chairman. Professor Hamilton, since you last testified before our committee in February at a hearing on affordability, the economy has become even less affordable. Trump's new uh trade war with Canada and countless allies is a direct attack on Americans' wallets, raising grocery prices and fueling inflation. His war in Iran has driven up gas prices with diesel over five dollars and sixty cents a gallon which raises costs for farmers truckers and small businesses. What's making things worse is that interest rates are going up on the government's debt which is also pushing mortgage rates up to almost seven percent. Trump's failed and unlawful economic agenda is forcing Americans to put their lives on hold, delay starting families, and give up on the dream of home ownership. Reportedly, one in five families are skipping a meal to make ends meet. But there's one family doing great, Trump's family. The wealth of Trump's family is flourishing as he cuts deals, approves bank charters, and solicit gifts from his family's businesses. At the same time, the Trump administration rewards billionaires who kiss the ring, and punish anyone who speaks out about corruption. In fact, one of the witnesses on the panel has to compete directly with the president's stable coin, even as the president writes uh, uh writes the rules for the stable coin industry. And he can't complain either, because he knows there will be retribution. So, Professor Hamilton, I have a simple question. Is Trump's economy good for all Americans or just Trump's circle? Are Americans still priced out of American dream? What current uh concerns you most about Trump's agenda and its impact on families?

I would say that the economy is certainly not good for the vast majority of us in in this moment. I would say that um incoherent trade policies that seem to be transactional and not necessarily stable uh does create a vulnerability with regards to affordability it it it uh also has the effect of frankly weakening the dollar um i would say that unproductive debt on military paramilitary and uh uh perhaps tax cuts for the wealthy is is not a good way to uh promote an inclusive economy and it does indeed lead to strains on interest rates, treasury yields, which impact affordability with regards to housing. There are productive forms in which we could spend the treasury uh by way of investing directly into the American people which would not only address the affordability as the point If people have investment to purchase housing, it also gives them greater power by which they can access exercise economic agency to benefit themselves and the economy overall.

Thank you very much. Well, I just wanna ask you this, um, we know that the tariffs increase the cost of goods and services for America. Canada is uh saying uh that they're not gonna put up with what Trump is doing, and they're gonna have retribution. What does that mean? Does that mean additional high prices for Americans trying to deal with the tariffs question and the retribution?

You know, tariffs should be used as a precise instrument to create fair trade and worker, uh, t- good working conditions. Um, but threatening, uh, Canada in this moment, it's not clear to me what is being used in order to promote a greater uh employment stability, a greater access to goods and services for the American people, and does lead to that that instability which uh again not only is incoherent, but eventually will weaken the dollar as nation's turn to other other trading partners and other mechanisms of finance.

Um, is it our responsibility to have the American people know what is happening, and who's causing it. What should we be doing?

Um, I'm I'm glad we are making clear to the American people what's going on with the, with the economy, so we we should definitely be, um, again, leading with values, and the values should be investments in the American people, and we should be trying to avoid, uh, specific transactions for, um, perhaps, uh, things that we're not clear about. uh in order to enrich certain segments and not have inclusive growth.

Thank you very much. You go back.

General woman's time ha- general woman's time has expired and the chair recognizes the Vice Chairman of our full committee Mr. Bill Huizinga of Michigan for five minutes.

Thank you, Mister Chairman, and uh Miss Martin, I'm gonna start with uh with you. I I liked how you laid out in your testimony the three items you wanted to hit, why markets matter, uh the state of public markets, and the future of those public markets. Um, and I I wanna start with uh maybe what you at NICE at New York Stock Exchange are doing to sorta pressure test your systems against coordinated attacks. Uh, and uh, and and our our regulators, those that oversee your uh operation on behalf of all of those shareholders, um, how are they doing? How are they performing? Is there anything that needs to be uh uh done differently? I know there's initiatives like glasswing and some other things that are happening. So fill us in a little bit on that.

Thank you so much for your question. Um, remaining reliable, resilient, stable, such that everyday Americans can grow their portfolios and manage risk in the most efficient fashion is our North Star. It is something we think about all day, every day. And to do so, we employ state of the art technologies to ensure that every time someone transacts on the New York stock exchange, they can feel that reliability, they can feel good about that transaction. As you pointed out,

And I'm assuming that extends to all of the the the various uh exchanges, correct?

Absolutely,

Yeah.

absolutely, because of the interconnectedness of the US securities markets in particular. But it has led us to have a long history in deploying state of the art technologies to really be the front line of defense in that effort. And as you noted correctly, we've been a early participant in Project Glasswing with the administration, um and we have been able to find a variety of items that we've been able to very quickly address because of the state of the art technology.

And and real quickly, uh are our regulators helping you keep pace, are they uh uh do we need to help

No, absolutely, the regulators have been working in great partnership with us on this effort.

Great. Good.

And we thank you for that.

Yeah. Uh, Miss Cranninger, uh, good to see you again, and uh, some of my colleagues will know that uh I often recount the story of my own family, small family business, doing trying to do real estate development on our on some property that we had for th three generations. uh that our initial regional bank denied us, not because uh we were a bad business risk, in fact we had had our uh personal and business uh accounts with them for three generations. But because the regulators stepped in and said, we think you got a little too much real estate happening here, and uh this was uh kind of in the twenty sixteen uh yeah. And four, literally four acquisitions later, we were back with after we had to go find and start with a community bank, we found ourselves back with the same bank that had denied us, uh that uh then still wanted us off their books because the regulators didn't like us there. Um, it it's it's the need for simplicity I think uh is pretty evident if people will open up their eyes to this. Um, look, this committee has worked uh for the last two years to make community banking work better for Main Street America. We en enacted significant community bank reforms through the bipartisan Road to Housing Act, uh the House passed the Main Street Capital Access Act, uh to encourage new bank formation, right size regulation, modernize outdated thresholds, bring greater objectivity to bank supervision, and hopefully make them business decisions, not regulator and uh and DEI kind of decisions. Um, so how do reforms like right-sizing regulation and reducing subjective supervision, not reducing supervision, but reducing subjective, uh, supervision translate into lower costs and greater access to products such as mortgages, small business credit, those types of things for, for all of our constituents?

Uh, Congressman, thank you, you, you make all excellent points with respect to where, um, supervision is critical. It is it is a basis for the banking system. The banks do want the examiners to have conversations with them about material financial risk really focused on the things that are core to safety and soundness core to efficient and effective operations of our banking system and at the same time there were many many years of conversations that were not focused on that where again there were things that were subjective or not as as well defined that were creeping into examination conversations and directing the banks when it came to the business that they believed and understood um like the example that you provided so right-sizing the regulation really focusing

No, I'm just

and training the examiners on on key things is important.

No, my time has expired. Yeah. My time has expired, Mister Schell uh Tarbert I'll have a question for you regarding digital assets and the infrastructure.

Sure. Now recognizes the ranking member of our subcommittee on capital markets,

Thank you very much for that.

Mister Sherman of California, recognized for five minutes.

Mr. Chairman, it's appropriate to have a hearing focusing on what this committee has accomplished in this Congress and I think the most important thing was the housing bill. Bi-partisan, substantial progress toward um uh what I think is the most important issue that faces Amer- uh uh Americans everyday that's within our jurisdiction. But aesthetically, the best thing about that bill is that it wasn't defaced by a sharpie. uh, and yet became law. Um, where we build and how we build is critical, and we need to open the door to manufactured housing and push local communities to zone so that people can afford to live. Inflation is, uh, a huge problem. We had the huge tax cuts for billionaires and now we've got a forty trillion dollar debt. We've got tariffs that raise the price of uh just about everything. And now we have a war of choice. Ah. The Republicans in the administration are not offering us any answer on affordability, except their one go-to answer, blame Biden. What we should be doing is prohibiting the export of American petroleum, Because we produce more than we consume, and all of our witnesses know that price is a matter of supply and demand, we have more supply than there is demand. And we should be regulating the price of all pharmaceuticals, not negotiating the price of a couple of them. Instead, to deal with inflation, the Fed looks like it feels that it's going to be slashing economic growth by raising interest rates. Uh, my party, some of it, some elements of my party made a mistake and started chanting defund the police, but this administration has actually done it. Instead of focus, uh, we should not defund the police that deal with crime in the s in the streets, but also crime in the suites. The CFPB had put twenty-one billion dollars back in the hands of Americans, uh, i and the slashing of it has, according to the Senate Banking Committee minority, uh, report already cost Americans nineteen billion dollars. But as ranking member on capital markets, I'm particularly concerned about the slashing at the SEC, an eighteen percent cut in staff, uh, closing the foreign corrupt practices unit, uh, the crypto asset and cyber unit, dismissing dozens of cases, uh, e- especially those, uh, uh, with, uh, the president's friends and donors, and undermining the consolidated audit trail. One of the things that would certainly undermine the consolidated audit trail, is this effort to tokenize um uh securities. Without a consolidated audit trail, we're not gonna have a truly effective way of dealing with insider trading, and there are a lot of powerful people in this country that like insider trading. So it's not surprising that we're seeing blowback on this. Um the uh uh I'm concerned that the that if the SEC provides exemptive relief uh to the crypto companies of to trade in tokenized securities, uh we will not know who, we'll not even be able to determine who bought or sold securities right before the big announcement. Um with regard to stable coins, the promise was made that stable coins would not uh uh pay interest Now the industry is trying to evade that. That evasion has got to be stopped. A report from treasury found that six point six trillion dollars in bank deposits could be lost, shift to this murky world of stable coins, and uh depress uh lending, particularly to small businesses. Stable coin is not going to provide a loan for uh the local pizzeria. banks, c particularly community banks, uh do. Uh, so, uh, the idea that the crypto industry would come to us and stay, let's have stable coin without interest, and then deploy millions of dollars of legal talent to try to pay interest, and then millions of dollars of lobbying to try to prevent a plug of that loophole, uh, I think illustrates what this industry is doing. If the um ecosystem of payments becomes stable coin, law enforcement will not be effective, our sanctions will not be effective, and we'll be making drug dealing great again by dealing with the greatest single problem drug dealers face and that's how to move the money, I yield back.

Gentleman's time has expired. Chair recognizes the chair of our task force on monetary policy, Mister Lucas of Oklahoma for five minutes.

Thank you, Mister Chairman, and thank you to our witnesses for being here today. I look forward to the discussion on how this committee has made tremendous achievements working with the administration to deliver results for the American people. Uh, beginning with you, Ms. Martin, last year the House overwhelmingly passed the bipartisan Invest Act. Would you expand on your earlier comments about what this means to capital markets to get that bill, when we get that bill over the finish line?

Thank you so much, Congressman, for the question. Um, we think that the passage of the Invest Act achieves is is the first path to achieving what I stated in my comments which is further cementing the US capital markets as the preeminent destination for capital raising and investment by parties and responsible investment.

The Invest Act includes my bill providing parity between the investments available to four O three B plans and other comparable retirement plans like four O one Ks. Workers that reply on four O three B plans like teachers, health care workers, non-profit employees should have access to the same investment products available to others so they can save and prepare for the future. And it's past time to send the bill to the President's desk. Turning to you, Mrs. Ms. Scringer, can you explain how the banking sector supports the broader economy? Why should Congress be looking to streamline and right-size regulations on credit providers?

Uh, thank you, Congressman. It's absolutely critical. Um, as I noted in my statement, we have banks of all sizes in this nation, and it it certainly is one of the things that, um, actually Dr. Pollack noted as well, that that drives the diversity of and makes the United States fairly unique is those banks of all sizes and you know that in the state of Oklahoma the community banks are helping farmers um everyday really bringing uh credit and capabilities to them because they know their customers, they know the seasons and the cycles, and they're able to provide that credit and and lend to them. And so when you look at a lot of the things that are particularly in those community bank levels really focused at local um local activities, Having regulators from Washington looking at a one size fits all standard across the country and a product that you know they can understand is easier to regulate, but does that actually meet the needs of the local community? And when those banks are having to hire more compliance people than lenders, again, there is a a mismatch there in terms of what we're trying to achieve. And so really right-sizing the regulation is about exactly that.

Mr. Pollack, would you share your thoughts as well? on why market driven reforms, the best path forward for strengthening the economy. Expand on your comments, I guess I would be a better way to put it, please.

Uh, Congressman, I just say we know that the best thing for the strength of the economy are vibrant, uh, free markets, uh, best uh, for the uh entirety of the society and the getting the regulation right. So it is a a helper of the uh of the competition of the free market and not a not a cost creating uh burden is certainly key.

Absolutely. And as we look around the history of this country and the economies of the world, whether it was the dual banking system charters that we started with in the eighteen sixties, both state and federal charters, or what we saw happen to places like the Soviet Union with a command economy driven by central committees, uh, this is still the best model in the world. Absolutely. Thank you. And with that, Mr. Chairman, I yield back.

Gentleman yields back. Chair recognizes the gentleman from New York, ranking member on our House Foreign Affairs Committee. Mister Meeks, you're recognized for five minutes.

Thank you, Mr. Chairman. Let me address the question to you, Professor Hamilton. Um, I'm sure you'll agree that working people and middle class uh Americans are not experiencing the economy through aggregate uh statistics. They are experiencing it through the cost of groceries, the cost of health care, the cost of their rent, gas prices, while the labor share of national income also remains historically low. So I wanna ask you, Professor, beyond the headline job numbers, what is the single best indicator of whether workers are actually getting ahead and achieving things, you know, for me in a district like I represent, like home ownership or building their savings, what would you say we should be looking at?

That's a difficult question, uh, to find a one single bullet, uh, but, uh, would would clarity looking at growth alone with no understanding of distribution clouds the picture of the ways in which the typical American experiences the economy. Why? Because we have so much asymmetry with regards to power. And first and foremost, our growth statistic even in and of itself is not doing so good. So we don't have a high level of growth, but whatever growth where we have is being propped up by, again, the now infamous K-shaped economy where uh those that are most affluent amongst us are doing exceptionally well, where we have divergent pathways of income, employment, and wealth for everyone else.

So let me ask this question because this committee I know that remember Waters and um has worked very hard on this as well as uh the chairman uh dealing with housing costs. Um, so if Congress asks to lower housing and other living cost, what's the accountability mechanism, you think, uh, we should put in place to make sure that those benefits translate into meaningful relief for workers and their families?

Thank you, Congressman. Uh, wealth, right? I I think uh one of the one of the points and benefits of something like acce access access to housing, and we saw this in American history, when we provided greater access to home ownership. Unfortunately, it wasn't extended to all demographic groups. Uh, we had the greatest surge in the American middle class. So having the benefit of something like home ownership or capital in general, facilitates the capabilities of Americans not only have security, here's perhaps even the better point, to have economic agency, to have economic agency,

Thank you. Wealth building. I mean, in my community, what we talk about there is buy the house and rent the car. Because one, when you buy the house, that's dealing an appreciating asset, building wealth. But if the car, if you buy the car, that is a depreciating asset, preventing you from having wealth. And so I I I couldn't agree with you more, uh, in that regards. That's a big focus of mine. But let me now go to Miss Martin. Um, America's capital markets, you know, they're the envy of the world, but I don't believe they can be taken for granted. And that's one reason why I was proud to help to lead. Again, it was a bipartisan, uh, uh, in- invest act, which passed a house with an overwhelming bipartisan support And among other things, the legislation seeks to reduce unnecessary barriers to capital formation and make our public markets more attractive and accessible to growing companies. So, Miss Martin, from your perspective as President of the New York Stock Exchange, can you please give your thoughts and let our friends in the Senate particularly know how the Invest Act can remove some of the barriers today that discourage growing companies from going public and how can reforms like those included in the Invest Act, helps strengthen our public markets.

Thank you so much for your question, Congressman. Um, the Invest Act was clearly a pivotal moment, the passage of that, the bipartisan, as you pointed out, passage of that act was a pivotal moment in I think further cementing the US as the preeminent destination for not just capital raising, but investment. It broadens out the ability from an investment standpoint that everyday Americans,

Mm-hmm.

not just the wealthy, can invest their hard-earned dollars into the markets.

Thank you, Ms. Martin. Gentleman's time has expired. Chair now recognizes the gentleman from Texas. Mister Sessions, you're recognized for five minutes.

Mister Chairman, thank you very much. Uh, my thanks to the panel that is here today on this important discussion. Uh, Mister Tarbert, uh, you and I are friends, we've uh worked with each other before. We're uh both involved in Boy Scouting, Eagle Scouts, just as our young chairman is an Eagle Scout also. Congratulations to you trying to further that with your sons. Uh, Mister Carver, you and I have spent a good bit of time in your conversation with this committee today, uh, t- spoke about the dollar, the importance of the dollar, the strength of the dollar, national asset but worldwide. Uh, couple years ago, uh, this counterweight to this, BRICS, became a discussion uh to level the playing field for those that are not in the United States, to lower Western influence. Uh, it was a direct challenge against this important dollar component that you and I have spoken of many times. Uh, President Trump went and I think changed that uh counterbalance brought back six trillion dollars to the United States that would compete then in, in the world currency. Please have a conversation with myself about this ongoing effort for the dollar to be the dominant position. It's importance in international world. It's imp- importance for uh the reserves of the country, uh doing business with the country. Please take a few minutes and and and talk have that conversation.

Thank you so much, Congressman Sessions.

I

And of course it's great to see you again, and all of your great work on national security and finance and how they intersect. And the dollar is right at the center of all of that. The dollar is an asset of the United States, uh, for all the reasons I said in my testimony. It's beneficial, it has national security benefits, economic benefits, and all sorts of other benefits as well. And obviously, the important to the dollar is a strong fiscal policies, st- strong monetary policy, all of those, but we're seeing the plumbing of the financial system change with digital assets. We're seeing the emergence of an internet financial system, as we call it. And it's critically important, in my view, but I I know in the view of this Congress as well, having passed genius on a bipartisan basis, that the dollar continues to be a part of that system. as that system grows, and not just the dollar itself, but really the system of law that underpins the dollar. Our counterterrorism financing, rules and regulations, uh our consumer protections and everything else, and that we have just as much a a role, a leadership role in the new internet financial system as we've had in the global financial system to date. And so it's this is really critical that the United States, as I said in my testimony, own these rails, US innovative companies here help build that system, and that it's the rules of the United States that govern that system in the twenty-first century.

Thank you very much, uh, Mister Pollock. You have a con you've had a c- strong conversation with us about rule of law, capitalism, investment, all these things. Why is it important for the United States to not become one of the boys, like the other countries? We could say Canada that has uh a small growth rate. They have been stagnant. The United States on the other hand has been growing with the largest economy. Can you talk with us about the importance of what this characteristic is, capitalism?

Congressman, I'll do my best. The um this ties back uh exactly in my opinion to your comments on the dollar, and the strength of the dollar for for American uh, economic leadership, it's, uh, it's important that we are big. It's more important that we have science and technology that build into entrepreneurship uh and economic growth which benefits all uh, it's even more important in my opinion that we have a system of the rule of law, and the protection of property, and the enforcement of contracts that creates the infrastructure that makes it possible for the United States to be the center of the financial world.

Mister, thank you very much. Mister Chairman, I think the conversation that has been held today by this committee is very important as it is part of the national dialogue content, about which direction we wanna go. And I will tell you that I think that our witnesses today have carefully chosen the words to say "Let's have America still be the leader in the world" with not just capitalism but with strength and avoiding chaos. Mr. Chairman, I wanna thank these members, these uh people who've come to talk to us today and I yield back my

Gentlemen, it yields back. Chair Rankin uh recognizes the ranking member of our task force on monetary policy, Mister Vargas of California, you're recognized for five minutes.

Thank you very much, Mister Chairman and ranking member, appreciate very much the opportunity and I also wanna thank each and every one of the witnesses and welcome back to some of you I've seen you I've been here for a while and I've seen some of your faces and again thank you for being here. Have to say I was here for the opening remarks about the economy and heard a very sunny description. And it was almost fantastical to listen to because certainly it's not what the headlines are screaming from all the newspapers. And in fact, it's kind of interesting because I do read and w not watch much, but I do read Fox News and even Fox Business said this. US econ- this is on August twentieth, uh twenty twenty six. The US economy worse off than when Biden departed. It goes on to say President Donald Trump is quote " unpopular because the economy is worse now than it was when Biden left office." Schiff, chief economist and global strategist of Euro-Pacific asset management, and host of the Peter Schiff show podcast told Fox News Digital during an interview on Wednesday. So Trump ran on promising to fix what Biden broke. But then broke it more, Schiff asserted. He said that prices will come down one day, on day one, as soon as I become president, Schiff said, adding, " Inflation is a bigger problem now than it was when Trump was elected." I mean, that's what I hear, that things have gotten worse. Not that things have gotten better. That this administration has made things less affordable. Now I I do wanna congratulate the the chairman and the ranking member. I think you guys did a very good job on the housing and I appreciate that. I think the American people do. We need to do more. And and hopefully we will next year uh, rank a member when you're in charge. Well, I look forward to that. But I gotta tell you, I I mean it it doesn't, if you're out there with people, you'll see that they're not saying that this economy is better. If you're a billionaire, certainly it is. I was shocked When my friends on the other side of the aisle, who I've known for a while now, were saying that they would not, you know, make the economy worse, they wouldn't raise the debt, they wouldn't do all these probs. And all of a sudden they they vote with their big ugly bill to give literally trillions of dollars of tax breaks to their wealthiest friends, and they saddle the rest of the Americans with five trillion dollars more on the national debt. I mean, we look at the the yields now, the the ten year, the thirty year trade yields, and they're the highest they've ever been. We look at a forty trillion dollar debt that we have. All of this lard is hurting the American economy and certainly the American people. And we're giving tax breaks to the wealthiest people that don't need it. It's outrageous. Mr. Hamilton, you spoke a little bit about this. I mean, talk a little bit about the forty trillion dollar debt that we're in right now. and how that is hurting people and how the tax giveaway to the wealthiest Americans isn't doing a damn bit of good to the rest of the Americans, the rest of all of us.

Yeah, the the the concept of debt in productive investment in and of itself is not bad. But you are right, Congressman, when you're describing a context of spending our treasury towards tax cuts for those that are already affluent. and certainly didn't need it. And uh, frankly, I don't think it's productive for us to increase both our domestic military and our foreign military in this context when those vital resources could be going more directly to the American people.

Yeah, and one thing I do wanna mention which is obvious to most Americans and I think to the world and we haven't talked about it yet is climate change. The risk posed by climate change. everywhere in the world, we see it dramatically. And yet, you see that the Trump SEC has decided to rescind the climate-related disclosure rules that we established in May of twenty twenty-four. We're going the wrong way. We're literally going the wrong way on all of these things that are important to the American people and the American economy. Again, I worry about the dollar. I worry about it very much. You know, yes, I think that we earned that position, but we do see it slide in because the rest of the world looks at us and see us clowning around when we're attacking our friends in Canada. When we're putting on these useless tariffs all over the world and he does them, you know, just like this, he doesn't even know what the hell he's doing. And yet he just does them and the world looks at us like, what the hell's going on with the Americans? And that's why the dollar's sliding right now, no one trusts us. We're going the wrong way. The American people know it and I think they're gonna correct it soon. With that, I yield back.

Chairman yields back, chair recognizes the chair of our subcommittee on capital markets.

I thank you, Mister Chairman, and first I'd like to uh enter into the record a letter from ICI, the investment company institute, regarding uh how important this hearing is and also how important it is that we pass the Invest Act through the Senate and get it to the President's desk.

Without objection.

The American financial system works best when it works for all Americans. Whether you are a new family, saving for your future, a small business owner trying to grow your business and support your employees, or you're a retiree on a fixed income. We all need strong markets to lift our economy. From providing additional flexibility to entrepreneurs and startups, helping millions of Americans to build wealth through Trump accounts, Republicans have taken a strong and firm stance. It's Main Street's turn. Ms. Martin, in your testimony, you mentioned that the number of US listed public companies dropped by nearly forty percent between the mid-nineteen nineties and uh twenty twenty five. This year, however, we've seen the IPO market raise record amounts of capital. Could you describe what led to this particular change?

Thank you so much for your question. Um, we are seeing a variety of optimistic things. Um, more streamlined disclosures, more streamlined regulation, that are opening up our IPO window and opening up the markets. Mm-hmm. And the promise of that streamlining of disclosures is really what is leading those innovators to tap the most liquid, most transparent pools of liquidity, which is the envy of the world, our American capital markets. And the fact that our markets continue to show strength, our capital markets continue to show strength, even though there are periods of volatility, further give those innovators that confidence to tap that form of liquidity, to fund that next great Innovation.

Well, imagine that. Optimism, growth, promise. Uh, the future looks good in terms of those that are trying to grow capital and invest in the future in business in their retirement savings their wealth. Imagine that. Um, why is it so important that American investors and families have access to healthy IPO market?

It's incredibly important that the everyday investor, Main Street as you put it, and Main Street as I mentioned in my testimony, have access to these innovations, can participate in the upside of these companies who are truly creating new products that will change the world, and will fuel the next great age of innovation. in America when they're still in that formation stage, when they're still in that high growth stage.

Yeah, I couldn't agree more. Still, I'd say that executive action isn't enough. Congress has a role to play here, too. That's where my bipartisan Invest Act comes in, a twenty-two bill package of common sense reforms that will strengthen our markets. further expand access to capital for small businesses and create new investment opportunities for families, families in Missouri's second congressional district, all while maintaining vital investor protections. Ms. Martin, would the reforms included in the Invest Act help more Americans benefit from economic growth and ultimately improve affordability?

It will broaden out the ability for Americans to participate in the growth that I described. Um, and those those Main Street participants are the ones that are, as you point out, not just saving for retirement, but they're putting their savings into our capital markets, which then enable them to buy their first homes. They enable them to put food. on the table for their family.

As I said, the very uh opening line, American financial system works best when it works for all, all Americans. Um, thank you, while I am encouraged to see that our colleagues in the Senate have begun the work of taking up capital formation legislation the American people cannot afford to wait any longer. We need to get this legislation across the finish line and to the President's desk. I thank you, Mr. Chairman, and I yield back.

Wagner yields back. Chair recognizes the ranking member of our subcommittee on national security, Miss Beatty of Ohio, for five minutes.

Thank you, Mister Chairman and ranking member, and thank you to our witnesses, and it is good to see all of you, but especially Professor Hamilton and former Chair Craninger. Uh, good to see you again. Uh, let me start with you, Professor Hamilton. Throughout my time on this committee, including as former chair of the Congressional Black Caucus, And as the first ever, thanks to then uh leader of uh this committee or chairwoman of this committee, Maxine Waters, I was the subcommittee on diversity and inclusion chair. Uh, closing the wealth gap and making the financial system work for everyone has been the center of my work. When we talk about affordability, we cannot forget that these burdens do not fall equally. Recent Federal Reserve data show that Black and Latino households heightened economic insecurity and this administration's mass federal layoffs have fallen the hardest on black women who make up roughly twelve percent of the federal workforce Professor Hamilton, your scholarship has focused exactly on these disparities. Can you explain why Congress cannot fully solve the affordability crises if we ignore the racial wealth gap and rising economic equality?

Thank you, Congressman. Always great to see you as well. And and I think your question is spot on, and the work that you are doing begins first and foremost with morality. I think we should begin with that. The point is, we should do good because it's the right thing to do. And the racial wealth gap is an immoral blight from our past, so we should redress it. What's more is that when people are empowered, I've been saying this repeatedly, not only is it good for them and the right thing to to do, it is it leads to an inclusive growth, a a a growth with values. Um, you also brought up the issue of debt and affordability. As we continue in the line of talking about morality, what is immoral is the imposition of indentured debt. The the the vulnerability of having to take debt out because you don't have enough resource for basic needs. that's not a choice, that becomes a survival mechanism. And when people are in that scenario, the wages that they accrue go towards financing debt in terms that are below market rate. So we end up with scenarios of those that can least afford it having to pay higher and higher rates for credit which is not sovereign debt but rather indentured debt. So these are critical important issues. The other point that you raised was um, a surge in Black women unemployment in particular. So, of course, unemployment plagues both Black and Black men and women, but as we think about cuts to our soc- our civil service, uh, that particularly hurt Black women over the - over the, uh, previous year, couple of years. Um, but here's another point that we should think about. In addition to the pain that's born about of those civil servants who show up at work all the time. Those are important jobs that are good for our American infrastructure.

Thank you. Uh, let me go to Miss Craninger. Uh, certainly we spent a lot of time when you were the chair of CFPB, so you know the system as well as anyone. And fixing our broken credit reporting system has long been one of my priorities in this committee. I was proud to author a piece of Comprehensive Credit Act to give consumers a fair shake. And here's what troubles uh me. More than half of Americans carry medical debt of some kind, and in one of thr- and one in three say it keeps them from buying a home or saving for retirement. Mrs. Kraninger, in twenty twenty you told this committee uh the CFPB was working so minorities could build wealth and close the economic divide. But we know medical debt hits Americans especially hard and can affect access to care. Fifty-six percent of black adults own money for a medical or dental bill compared with thirty-seven percent of white uh adults. Uh, so can you um, based on uh those facts, can you tell me how does leaving forty-nine billion in medical debt on fifteen million credit reports and denying family's mortgage, because they get sick, square with your goal?

Congresswoman, it is good to see you, and I'll say this is this is an important issue, and and one I know that Congress has has debated and that the regulators will continue to look at. I guess from my current position I'd say the credit reporting system is incredibly important and valuable to so many Americans and the the way in which they were actually you know assessed the risk um of lending to them and their ability to repay that's the core dynamic of the credit reporting system so s Thank you. Thank you.

Uh my time is up. And and may, Mister Chairman,

Sure.

may I ask that we can continue this off-line?

Yes, I invite you to respond to uh the

Thank you.

ranking member in writing. Chair recognizes the chair of our subcommittee on financial institutions, Mister Barr of Kentucky, recognized for five minutes.

Miss Kraninger, good to see you. Good to see you yesterday. Um, thank you for your leadership at the Florida Bankers Association. Um, states are trying to use uh uh uh strained legal arguments to justify exporting their interest rate cap laws. And that is diminished consumer choice for their own citizens. Not only do rate cap laws reduce the amount of lending that local banks and credit unions will engage in, but such laws also reduce the likelihood of out of state firms bringing much needed competition and choice for consumers. Miss Kraninger, can you tell us how state's abuse of DITMCA has hurt uh consumers and how the American Lending Fairness Act of twenty twenty-six would help remedy that?

Thank you Congressman, uh thank you for the important question, I know that bill is attached to to this hearing and an important topic. Um as you well know Congress passed DIMICA uh to really put state chartered banks on the same level with national banks and their ability uh to provide lending and products and services on that equal basis nationwide and and to allow actually states to

Thank you very much. Uh, Mr. Tarber, good to see you again. Mr. Tarber. Good to see you again. Um, why is the dollar's global role as the world's trusted reserve currency important?

It's critically important to our national security as well as our economic security. Uh, it lowers the cost for American families of groceries, mortgages, uh, and other consumer products that we don't even realize, folks down in Kentucky, for example. Uh, and in addition, it obviously funds the s- world's strongest military. So all of those are critically important features of the dollar being the world's

So what besides the genius act or in addition to the genius act, what does Congress need to do to maintain the dollar's dominance?

Yeah, well, I think the Clarity Act, which this this house passed on a bipartisan basis, is critical because it it basically regulates the layer above the dollar layer of the internet, all the markets on top of it, as well as provides safeguards and incentives for American companies to build the underlying infrastructure. All of that together will help advance the dollar and get it to parts of the world where people wanna hold dollars but d- can't necessarily do so using the traditional banking system because they're they're they don't have access, but they do now via stable coins.

Well, I think economic growth also, make making sure that we solidify the United States' economy as the world's Envy, the envy of the world is also critical to the dollar's dominance, which brings me to my final question to Ms. Martin. Um, you are the president of the New York Stock Exchange, the world's most iconic stock exchange, the heartbeat of the American capital markets, as you rightly say, the deepest, most liquid, competitive capital markets in the world. I recently heard your Fox Business interview, uh, near the fourth of July, the two hundred and fiftieth anniversary of our country, and I loved your optimism and your expressing your view that America's best days are ahead and I think what you said was, our capital markets has really been the secret sauce of our democracy for two hundred and fifty years. And I'm sure um in your uh position you've taken note of the recent elect- election victories of self-described socialists, uh who reject uh that uh model, uh who uh have claimed that our market economy um who have claimed that our market economy and our free enterprise system, uh in the words of

Thank you so much for your question, Congressman. Um, as you rightly say, As you rightly say, The American capital markets are really the secret as to why this country has been successful for those two hundred fifty years. They have fueled every great innovation that this world has seen, various parts of the capital markets. And it's why at the New York Stock Exchange we take our role extraordinarily seriously, in terms of fierce protection of those capital markets, from a couple of different perspective. ensuring that the most innovative companies can tap the public markets to raise the capital that they need to fund their operations to fuel that next great innovation.

Miss Martin, I'd incor encourage you to finish that thought in in writing for Chairman Barr. Gentleman yields back. Chair recognizes the ranking member of the House Intelligence Committee, Mister Hymes of Connecticut, for five minutes.

Thank you, Mr. Chairman. Um, over my many years up here I've tried to ask good elucidating questions to learn stuff, but every once in a while I got a sort of weighed into this stuff and uh the chairman, one of my favorite people uh in the universe uh uh kicked us off with uh an encomium to this incredible economy that we're living in. Look, I understand why we need to do this. We're two months away or so from the election. But are you kidding me? George Orwell is rolling in his grave right now. Let's just do a little thought experiment here. Let's imagine that Donald Trump is inaugurated and a bunch of people get together and say let's do the things all the things that will destroy the American economy. Let's start with tariffs. Let's tariff our best and biggest trade partners so that they now hate us and won't trade with us. And by the way, oh, here's a good idea. Let's not just do tariffs, let's make them unpredictable. Let's change them up every couple of weeks so we have no predictability in our trade. Oh, oh, and here's an idea, um, let's, let's pass a massive tax cut that adds two trillion dollars to the deficit. Well, we're seeing the effects of that, uh, on the thirty year and the ten year bond, and and and and and and here here here's an idea. Let's have an immigration policy that makes sure that nursing homes and restaurants and construction of housing can't find workers cuz they're cowering in basements. Yeah, let's do that. Let's oh, hey, I got an idea. Let's start a war in the Middle East and take the price of a barrel of oil from sixty dollars to a hundred dollars or a hundred and twenty dollars. Let's do all those. They did all those things. And you know what? My Republican friends are right. You know, we got our heads handed to us in the last election because we dealt with inflation, which was driven largely by COVID. We came up with a four-syllable Latinette to explain it. We said it was transitory, political mal malpractice, and boy, did we pay a price. Do you know what we didn't try to do? We didn't try to put lipstick on a pig. The ten year and the thirty year bonds, we're in the Financial Services Committee, we know what that they, They're screaming record highs, deficits, forty trillion dollars, interest rates going up, inflation well above the Fed's target. I could go on. But what matters here, and certainly what matters to my friends in the majority, is consumer sentiment. Now you can say consumers don't really understand economics, that's a politically perilous thing to do. Or you can say consumers are actually smart and they know. Well, here's the thing. Consumer sentiment The Michigan study, zero to a hundred rating. Donald Trump's inauguration consumer sentiment, it is seventy-two. Today, does anybody know what the Michigan study's uh, uh, uh, consumer sentiment number is today? Seventy-two to what? Any witnesses know? It's fifty-two. Twenty points lost. We have a consumer driven economy. And so my Republican friends are saying everything's fine. We're all old enough to remember the movie Animal House here. Remember Animal House? At the end of it when the boys of the Delta fraternity have destroyed the town, and there's people getting fired out of cannons, and everything is going crazy, and the parade has been destroyed. There's Kevin Bacon. Kevin Bacon plays a character called Chip Diller. And he's in uniform and he's saying, " All is well, all is well, no reason for panic." Well, he, of course, Chip Diller gets run over. That's where we are. That's what's happening in this hearing right now. But facts are stubborn things. And the American people know. And that's why consumer sentiment has gone from seventy-two, president was inaugurated to fifty two today. So I'm done pontificating, but I do have a question. I only have a minute and a half, so this is a little thought experiment for all of our esteemed witnesses. And I'm gonna start, and by and and by the way, I'm I'm all for talking about crypto and uh about I was I voted for three out of the four crypto bills here and I'm all for good capital markets. I helped with the jobs act et cetera. But let's just in the remaining minute here, I wanna go left to right, starting with Mister Talbert. You have a button in front of you. And that button allows you to either stop or to continue the Iran war. Which button do you push, mister Talbert, economically speaking, economically speaking?

I think I need to think a lot about it before I push any button.

Energy costs. Which button do you push?

Again, I'd have to think a lot about it uh to to think about it.

That That that that this is not a hard question. Miss Kraninger, you can stop or accelerate the Iran war. What do you do now from an economic stability

I I agree with Mister Tarbert, these are things to think about, particularly given where we are today.

Really? So I can't get a witness to admit that it's really bad, that oil pri that gasoline prices are up a buck twenty, that the average American family has paid an additional six hundred dollars, and you guys can't answer this question clearly for me? Explain that for me. Doctor Jackson, can you clear this up for me? Sorry um, it's not Doctor Jackson, it's uh Doc Doctor Hamilton, I apologize. Dr. Hamilton, let me give you my last five seconds on this topic.

And unambiguously, I would not be in this war.

Thank you. I yield back.

Chairman yields back. Chair recognizes the chair of the House Small Business Committee, Mister Williams of Texas, for five minutes.

Thank you, Mister Chairman, and unlike some people in this community, I'm a small business owner. I still own a business, fifty seven years, and I gotta tell you, business is pretty good, and I'm a car dealer to go with it. And so, um, throughout the United States, local community banks are the, uh, lifeblood of their towns. funding the family businesses, farms and entrepreneurs that fuel Main Street. And for years Washington bureaucrats have treated community banks like they are big Wall Street investment firms piling on regulations created for large scale institutions and this has uh stifled local lending accelerated consolidation and created banking des uh deserts in across uh uh rural America, and which is much of what I have in my district. Uh the Main Street Capital Access Act right sizes these regulations by restoring common sense tailoring and not punishing community banks with more burdensome compliance. So Miss Kroeniger, good to see you again. Uh, how have uh punitive compliance costs led to fewer local loans and higher costs for rural communities? And how would removing these hurdles help communities across the country?

Oh, Congressman, it's excellent to see you again, and you know this issue very well, as you noted as as a small business owner yourself and someone who has many community banks in in your j district and and servicing the businesses there. the the regulatory regime really has been fairly stifling. I mean, we have seen it in the number of community banks that uh were not able to continue, and certainly not able to continue in in consumer lending space in particular because of the compliance burden and the number of compliance people that they were having to hire beyond their lenders you know that became compliance became the business that they were in as opposed to looking at what their customers' needs were and what the community's needs were. And don't get me wrong, you wou you would agree that there is an important role for the government in setting regulation and setting standards, but there does need to be a balance against that. They're in the business of, you know, really serving their communities and not in the business of of serving the regulatory regime.

Yeah, more compliance officers and loan officers, as we said, big problem. For a small business to succeed, uh, and question also to you, uh, they need a banking partner who have liquidity to lend and a time-line that allows investments to mature. Regulatory limits are restricting any access to credit. The Main Street Capital Access Act tackles this by expanding uh funding sources for community lenders allowing lenders to better support their communities and this bill includes merchant banking the b uh Modernization Act which extends the federal holding period limit on merchant banking uh investments uh from ten years to a realistic statutory maximum of fifteen years so this ensures financing timelines match the uh real-time development of local businesses so again to you Uh, can you explain how combining uh community bank funding, relief with a fifteen year merchant banking extension, gives lenders the stability they need to support Main Street businesses?

Uh, absolutely Congressman, there's many important provisions in the Main Street Capital Access bill that we would love to see enacted into law and really it's it's the the compilation of these things that are helping uh allow community banks to really tailor their services to exactly what their customers need. And as you noted, rather than arbitrary timelines or limitations that are not enabling them to to provide those good products and services. So appreciate all of those um extensions and and changes in deadlines that are thoughtfully you know put into place in that bill.

Absolutely. Uh, Miss Martin, the time I have left, uh, access to capital remains one of the most significant barriers for first-time entrepreneurs looking to hire and create jobs and in order to scale their businesses start-ups need efficient pathways to transition to public markets. The Invest Act addresses outdated disclosure reporting requirements that have led to the multi-decade decline in the number of US public companies. So the question is, based on your time uh leading the New York Stock Exchange, how do heavy upfront regulatory costs restrict the growth of small business? And how will the the streamlined uh accommodations in the Invest Act help expand the pipeline of successful job creating companies in the country?

Well, we're very supportive of any furtherance of the capital markets and the ability, as you rightly point out, Congressman, to allow companies to more efficiently cap tap our capital markets and various provisions of the Invest Act, various regulatory moves by the SEC, um, to provide clear disclosures and require companies to provide clear measurable disclosures, we think is definitely a good path forward and is part of the reason why you're seeing so many of these companies start to think about coming out to public markets. That's why we've had, we believe, a record year thus far.

Well, we appreciate what you're doing. Competition is always the best medicine, and uh we want to have competition with our community banks and not lose them. Uh, I return my time back to you, Chairman.

Thank you, Chairman. The chair now recognizes our ranking member of the subcommittee on oversight investigations. Mister Green of Texas for five minutes.

Thank you, Mister Chairman, thank the ranking member, and our appreciate and thank the witnesses for appearing today. Uh, let's start with uh Miss uh Martin. Miss Martin, you're the President of the New York Stock Exchange, is this correct?

That is correct.

And uh you have multiple degrees, do you not?

That is correct.

One is in statistics, I take it?

That is correct.

Is that your master's?

That is correct.

And uh as the President of New York Stock Exchange, you only allow legitimate businesses to operate on the exchange. Is this correct?

We allow exchanges that operate under our rule set, absolutely.

But uh your rules would say that uh you would not have a illegitimate business. Is this a fair statement?

Anyone that complies with our rules, which have been governed by the SEC, is eligible to list on the exchange.

Yeah. Yeah, well do they do they require lawful businesses?

Uh, I believe that they do. And that would be part of our rule set.

Okay. Alright, thank you. Um, is a Ponzi scheme a lawful business? You have a, you have multiple degrees.

I

You're the president of New York Stock Exchange. Surely you can tell me whether a Ponzi scheme is a lawful business.

I can I am not sure the nature of the question.

A Ponzi scheme? Uh, well, the nature of the question is about a Ponzi scheme. You have multiple degrees. You're the president of New York Stock Exchange. And you can tell me, I am sure, whether a Ponzi scheme is a lawful business.

I have not familiar with a Ponzi scheme ever seeking to arrest the New York Stock Exchange.

Uh, I'm I'm not asking whether, excuse me, excuse me claiming my time. I'm not I'm not asking you whether you're aware of any Ponzi schemes.

Right.

I'm asking you whether a Ponzi scheme is a lawful business.

I do not believe that a Ponzi scheme operates in accordance with the law.

So you would say it's unlawful.

I cannot comment on which specific aspects of the law, but I cannot comment.

You're the president of the New York Stock Exchange. You have multiple degrees.

Absolutely. Absolutely.

Something as simple as a Ponzi scheme you cannot comment on.

I cannot comment on what specific question. You are asking that

The question is, now listen, you're on television.

I am.

Okay, all right. People are looking. I'm asking you whether a Ponzi scheme is lawful.

I do not believe, as I mentioned earlier, Congressman, that a Ponzi scheme operates in accordance with the law.

So then it's not lawful. All right, let's move on. So, if you uh knew that someone was operating a Ponzi scheme, uh would you, on your stock exchange, what would you do?

That would be referred to a regulatory organization who would examine the business in question and look at various aspects of our rules, and make the determination as to whether it and how it should be delisted.

And um, let's assume that it was concluded that it is a Ponzi scheme, it would be delisted, is that correct?

In accordance with our rules.

Okay. Now, um, are you familiar with something called the dollar sign Trump meme coin?

Uh

You know, recen- re- remember now, you're widely read.

Yeah. Yeah.

You you follow the news,

Yeah.

you chronicle news all the time, I'm sure.

Mm-hmm.

So you you, uh, please don't tell me you've never heard of it. Okay, let's not talk about the various. Let's talk about one,

Okay.

the dollar sign Trump.

Okay.

You've heard of it?

Um, possibly.

Possibly. You're not sure. Now, you're the president

Mm-hmm.

of the New York Stock Exchange.

Mm-hmm.

And you have not heard on more than one occasion about the dollar sign Trump meme coin?

We do not list dollar signs.

I'm not asking you about what you list. Have you, have you any knowledge of it? Have you read about it in a newspaper or heard about it on uh some uh television station? Have you ever

Potentially. There are a variety of meme coins that are talked about.

Well, I'm just talking about one, the Trump dollar sign right now. We can talk about the others on another occasion if you don't mind.

I would be more than happy to discuss it with you in further detail.

OK, then let's discuss it. Uh, have you heard of it?

I have heard of a variety of meme plants.

Uh, well, let's talk about just one.

I don't I

You're the president of New York Stock Exchange.

Mm-hmm.

Multiple degrees, widely read.

Mm-hmm.

My assumption is that you read the newspapers on a daily basis.

I do.

OK, well, uh, let me just tell you, it's a ponzi.

The gentleman's time has expired.

Thank you.

Here now recognizes the gentleman from Georgia, Mister Loudermilk, you're recognized for five minutes.

Well, thank you, Mr. Chairman. I appreciate the panel being here. It's a very interesting uh day and a good discussion to have. Um, Ms. Crandall, I'll start with you. I appreciate uh your years of service um and many times that you've been before this committee and and uh engagement we've had in the past on important issues. Um, during my time in Congress over the past twelve years, um, one of my priorities has been helping our small and community banks. And um that is been a priority of this committee too, especially this year of making community banking great again. In Georgia, and we would go back and we look at the two thousand eight, the great recession, Georgia lost more small in community banks than any other state in the nation. And um then as a result of Dodd-Frank, uh, the policies that were enacted made it nearly impossible uh, for the recovery of those banks, and we saw almost no de novo banks, especially in the community uh, and small business, uh, the small and community bank arena. We which which really left a lot of our communities in a desperate situation because we had counties in Georgia that had no local bank branch. Some didn't even have a bank branch at all. Um, with that, um, how important are these small and community banks to our overall economic and financial system in the country?

Yeah, thank you, Congressman, it's excellent to see you and thank you for your leadership in this in this area. It's critically important. Uh, as I said in my in my statement, this is one of the things that really makes the American economy so unique. The diversity of the banks that serve our communities down to the smallest communities and and then certainly to the largest bulk you know global institutions that we have uh that make our banking system. And so it it is a big concern to see the number of banks in the country shrink, to see the access and support in local communities change. Uh we're very encouraged though with what is happening in the last year and a half. We are seeing a significant number of de novo banks actually coming forward and forming. We're seeing regulators and Congress take leadership roles in reassessing and evaluating long-standing regulatory thresholds that don't make sense, and are actually hampering the creation of those banks. And so we appreciate your leadership in that area. It's important.

Well, well thank you and appreciate all that you're doing. Um, because the the broad stroke of regulation that we saw from Don Franken, and uh even through regulators, has an effect on small businesses. I was a small business owner during that time period, and of course my business, I was in the IT sector, was significantly impacted. Now, as a small business, we lived by a line of credit. We had a line of credit because in the IT business, a lot of the equipment that we're buying is pretty expensive on the front end, and when you do a lot of government, local government and education work, it may be ninety, a hundred and eighty days before you actually get paid. So, we used this line of credit to buy the equipment for these these contracts. Um, I was dealing exclusively with a small community bank. The banker knew me. Um, my numbers didn't weren't that great, especially for a new business, but he knew me, uh, we we were in the same circles in the community and uh, so he honored that line of credit which we had for many, many years without a Problem. As soon as Dodd-Frank was passed, I got a call from that same bank that says, we have to close your line of credit. I'm like, why? Said, because you no longer meet the requirements. Even though you've got a perfect record with us, we would we would love to continue working with it. We're not allowed to. This is why I have started working to tailor, I have the Taylor Act that would allow us to tailor regulations to meet the, the criteria of the, or the, you know, the business model. and the risk factor of the banks. How important is it for us to tailor regulations toward uh those models?

It's essential for exactly the reason you just noted, Congressman. There are um certainly there's a value in in having products and services that are commoditized in in certain markets, but when it comes to small business lending as a particular example in yours, and what is happening in the local community, how many people understand your business. Banks do have different expertise areas too in terms of recognizing what an IT um, you know, company would need versus a restaurant or the the farmers in your community. So having that expertise is also important at the banks and being able to tailor it.

Thank you, Greg. Thank you, uh, you're back.

Gentleman, he is back. Chair recognizes the gentleman from Illinois. Mister Kasten, you're recognized for five minutes.

Thank you uh to everyone who's come today. Um So when I was in middle school, um, one summer I'd I'd joined a town swim team.

My mother.

And uh, like Martin Shorten, that's men's synchro skit, I wasn't a s- real strong swimmer. But at the, at the end of the season, they had a, you know, a party to, you know, celebrate all our accomplishments. And they gave everybody on the team a trophy with all of the ribbons you'd won and all your meats hanging off your trophy. And I remember walking to the table and seeing You know, these first place, second place, third place ribbons hanging off all the trophies. And my trophy had one little lonely third place ribbon hanging off it. And that wasn't even the most embarrassing thing. It was I knew that I had never finished third place in a event. The only reason they put that ribbon on there was they knew it would be embarrassing if I had to pick up my trophy and not have a ribbon on it. You all are here today because my Republican colleagues would like a ribbon they haven't earned. And I apologize to all of you for having to be to be tokens in the ribbon presentation ceremony. I I also can't say anything more eloquently than Mister Haim's already said it, but w- w- the New York Times today is reporting that the G-twenty, at least nineteen members of the G-twenty are openly criticizing the United States for tanking the global economy because of a foreign policy driving up oil costs, a trade policy injecting tariff uncertainty, refusing to honor existing trade agreements, even ones that were signed by this administration. injecting massive uncertainty into the economy. The, we are seeing investors run away from long-dated US treasuries because they also don't like the inflation risk we're seeing in the United States, because they understand math. At a cost to something and the price goes up, this is not complicated. It's what the treasury secretary said before he was treasury secretary, the tariffs are inflationary, but now somehow that's a debatable point. Um, That in turn is driving up our cost of borrowing, including the forty trillion of dollars of debt which grew substantially under this Republican administration and this Republican caucus. Now I guess, if people in Washington feel good about FIFA giving them a peace prize, maybe you all could give my colleagues an economics Nobel prize, and it'd make them feel better. But my goodness, this is the Financial Services Committee. And we have real issues. So I wanna talk about real issues. Mister Tarbert, I wanna start with you. You mentioned in your testimony that stablecoin issuers currently own just less than one percent of US Treasuries, and yet Secretary Besant has actually argued that stablecoins will drive up demand in Treasuries and rein in the national debt. Is it your contention that stablecoin issuers have enough firepower to offset the current increase in treasury prices that Mr. Besant has so far been unable to counter? Just yes or no, is that your contention?

What I would say is the I'm I'm I'm I I think I'm

I'm I'm I'm I'm just asking the the Treasury Secretary has said that right now, that is one of the he's implied that's one of the tools in his tool kit. Less than one percent of US treasuries, do you believe they play a role in

Treasury, yeah, the the the stable coin issuers are on the lower end of the curve, so treasury builds, not necessarily long-term treasury bonds. So that's the first point. The second point is right now, as I said in my testimony, it's one percent. We believe it will grow,

O- okay,

but we I can't tell you how much.

well, well, you you did say in you did say in your testimony that the case for the genius

I think it could certainly help.

OK. W well, let let me shift. You you used to lead the CFTC, which among other things regulates interest rate swaps. Historically, interest rate swaps have generated a higher yield than the comparably dated treasuries. The swaps on those treasuries because of bigger liquidity in treasury markets. Should we have concerns that right now the treasury yields are higher than the swaps? What are markets telling us?

I'd have to go and examine that issue, uh, and and and uh and get back to you.

Well, I'd I'd appreciate you do it. I don't think it's complicated, but please do get back to us. Um In the two thousand eight financial crisis, this is for anybody who wants to answer. Secretary Paulson famously asked Congress for unspecified authorities, and he justified that by saying that with the markets in free fall, it was important for markets to think that he had a bazooka in his pocket, even if he didn't actually have one. We are now sitting here in a world where the current Treasury Secretary is buying buying long-dated notes and having no obvious influence, threatening economic D-Day, and then not going after China and Japan. Are any of you concerned that we now have a Treasury Secretary who is not only signaling to the market he doesn't have a bazooka in his pocket, but also that his pea-shooter is out of ammunition? Is anybody concerned with that? OK. Um I see I'm about out of time. But I'm I'll just close with what I feel necessary to cite in this hearing. Too often this term.

Gentleman's Thomas expired.

Jack Handy famously said, " I'd rather be rich than stupid."

Gentleman's Thomas expired.

Let's try to get rich. I yield back.

Chair recognizes the chair of our subcommittee on national security. Mister Davidson, you're recognized for five minutes.

Uh, thank you, Chairman, for putting this great hearing together. We've got some uh excellent legislation notice for it, and I hope we can get it through the finish line. Hear this, Congress' witnesses, thank you for your written testimony, for your oral testimony, and frankly for your service uh in this industry in a lot of ways making our country the envy of the world I mean with less than five percent of the world's population, we've got an amazing economy, almost twenty-five percent of the world's GDP, over half of the world's invested capital, Our markets are amazing. Everybody wants to be here. Um, but they're threatened by, you know, strangle, strangulation by regulation. We've seen regulatory, um, arbitrage opportunities, but we've seen regulation by enforcement. And what we're trying to do is just bright line tests so people know where, where the lines are. If you're driving down the road, you know where the rumble strips are, you know where the lines are, you know where the guardrails are. And, uh, we shouldn't see our regulators out there ambushing industries and we're seeing that in the federal uh federal space, particularly we saw it with the uh war on crypto. We see it in the realm of the Consumer Financial Protection Bureau where uh Miss Cranger you ran very well, but we saw Chopra come in and imagine things that he didn't do thorough notice proposed rulemakings on or stretch the bounds of things that aren't even in the scope of CFPB. But we've also seen it in states, and so I think about um a bill that for forty-six years, the Depositary Institutions Deregulata Deregulation and Monetary Control Act, that's a lot, so it's been shortened to something even simpler, DIDMICA, also not an easy acronym. But this is a a basic uh piece of legislation and the status quo was was not innovated for a long time. It It's really straightforward. It just set up a a way where state regulated banks could compete with a level playing field with nationally regulated banks. Now there's a way for states to opt out and say, no, no, our state regulated banks are states. But Colorado had this innovative idea that instead of regulating their banks, they were gonna regulate their citizens. And not by saying to the citizens, hey, you can't take out that loan. They're gonna say to banks in other states like Ohio, well, you can't lend to people in Colorado. Well, you don't have any jurisdiction in Ohio. And so it's a financial innovation, it's a regulatory innovation, and so you see this uh tortured language, and so I I think, you know, we're gonna keep seeing um common sense win in court, but Article Three isn't the only way that we're supposed to defend the law. We're supposed to do it here where we created the law. And so to provide that clarity, we've noticed for this hearing the American Lending Fairness Act, which should make it clear, the words mean what they've always meant, is you can regulate the banks in your state, but you can't regular bank regulate the banks in somebody else's state. So, Ms. Kraninger, could you talk about how important that basic understanding of wha- what the law is, uh, versus imaginary regulation?

And Congressman, thank you for your leadership in introducing that bill in the House, and you are absolutely right. Congress has a role to play here. In fact, Congress set the rules to begin with when it passed IDMICA and put the, uh, really made sure the dual banking system could work, put state chartered banks on an equal footing with national banks when it comes to lending uh across the nation. And yes, now we're seeing, um, not just Colorado but a a few other states following their lead in setting rules trying to impose their own state's rules on other states as you so aptly put it. Uh, so fixing this, uh, in in court as we'll continue to to fight that, and in Congress would be hugely beneficial to make sure we keep that dual banking system operating.

Well, th- their justification in Colorado was that this is somehow a way to protect consumers. And, you know, both having led the CFPB and now in the Florida Bankers Association, you care about consumers and have a long career service uh demonstrating that. So, how does this actually harm consumers rather than help them? uh when you see Colorado's approach.

No, it's it it really does. It's going to harm access to credit and it's going to really stymie the marketplace in terms of the competitive products that are available to consumers. So in terms of access uh and competition that'll that'll have an impact.

Thank you. And we couldn't have a witness from the Mises Institute here and not talk about sound money I think sound money is essential uh to defending freedom. We clearly don't have sound money today in our currency. We're seeing the evidence of that, because math is real. Uh, sir, could you please comment on the importance of money and affordability? How are they related?

They're absolutely related, Congressman. Thank you. The uh best um basis of growth, as the Mises Institute would say, but also as, say, Paul Volcker would say, is a sound currency that people can rely on, and we should always be working on that as part of our economic agenda. Well, well, not unless Thomas is part of it.

Thank you for that, and I yield back.

Chair now recognizes the gentlewoman from Massachusetts. Miss Presley, you're recognized for five minutes.

Uh, thank you, Mister Chair. I represent the Massachusetts seventh congressional district. Beautiful, diverse district, uh, also deeply unequal. In fact, in a three mile radius from Cambridge, home to Harvard and MIT, uh, to Roxbury's Nubian square, the the blackest part of my district, life expectancy drops by twenty-three years. and median household income by fifty thousand dollars. A new report by the Boston Federal Reserve finds that black families have seven thousand eight hundred dollars in net wealth, and on average, compared to white families who have an average five hundred and forty nine thousand dollars in median net wealth. Over a third of the people in my state cannot cover a four hundred dollar emergency and over a third of the people in Boston, my district have zero. retirement savings. My constituents uh sent me to Congress and I ran to confront these disparities head-on, and to close the racial wealth gap. That's why I was happy to partner with our witness today, Doctor Hamilton, and uh Senator Booker, to introduce the American Opportunity Accounts Act, to create a federal baby bonds program. Now Trump took this idea, entitled it after himself, he likes to name everything after himself, Trump accounts, and unfortunately watered it down so that the benefits are no longer targeted to the communities who need it most. What was once a bold proposal to ensure that every child, regardless of geography, race and family income, could prosper is ostensibly now just a tax haven for Trump and his cronies. But we can fix this. Doctor Hamilton, currently parents of newborns and young kids have to apply to set up a Trump account. But our bill for baby bonds would allow for automatic enrollment, which approach is better for actually helping working families and investing in all of our children.

Without a doubt, having access more universal should be the point.

Mm. Doctor Hamilton, what about the fact that Trump accounts gives a one-time payment of one thousand dollars to rich and poor children equally, rather than our ongoing approach of investments to our most vulnerable babies? Does that make economic sense for addressing intergenerational poverty?

It does not. It becomes inflationary. And then here's the bigger point. The main mechanism to grow the Trump accounts is a tax preferred savings mechanism For those people with resources to save in the first place. It ignores the fact that we have an affordability crisis, and the reasons that parents don't offer resources to their children isn't a lack of love, it's a lack of resource.

Would it be fair to say that the very uh gaps uh that we uh aim to close could be deepened?

They will grow, but they will grow. That's right. It, and, and unfortunately, it's part of a pattern in the ways in which we use our tax code in general. We subsidize the savings of people that have savings to begin with. One quick statistic is that eighty percent of Americans don't engage in active savings again not because they're financially illiterate, they don't have resources to save. The ways in which they grow their wealth is passively, which is why uh you have that great bill to promote an authentic baby bonds program.

Thank you, Doctor Hamilton. Trump accounts also

Well, it is correct, because it it uh it is progressively seeding resources so that we can offer everybody the access to wealth to grow their account. The real quick good news is that we have a new interest and now seeding intergenerational mobility for all our people, so we can get it right.

Thank you, doctor. Every child deserves an opportunity to grow and thrive and prosper, but our economy is stacked in favor of the ultra-rich. Trump accounts as currently implemented m- actually makes the problem worse, and that's what we would expect from an administration that is getting richer, while working families by the hour are getting poorer. So I am pushing for the adoption of our baby bonds bill, the American Opportunity Accounts Act. We need real investments to break the cycle of intergenerational poverty, close the racial wealth gap, and create an economy that works for everyone. Uh, Mister Chair, uh, I'd also like to, uh, ask you to give me some consent to, uh, enter a report.

Without objection, the General Lady's time is expired. Chair recognizes the chair of our subcommittee,

Um,

Digital Assets.

I'm sorry, Mr. Chair, I didn't get to say the title of the report. Can I finish that?

Uh, sure.

Okay. Alright. Um, so I wanna enter uh into the record uh the two thousand twenty-six Boston Federal Report, Family Wealth in Massachusetts. Finally, thank you very much.

Without objection. Gentlewoman from Michigan, our conference chair, I'm just playing you recognize for five minutes.

Thank you, Mr. Chairman, and thank you all. for being here today. I appreciate it. Um, over the last couple weeks I've spent a lot of time in my district talking to folks all across Southeast Michigan and they're doing everything right, right? We're still digging out of Biden's mess where inflation hit upwards of nine percent, but we've cut inflation to about three percent, but we still have work to do. And my constituents are happy. They they're they feel like they're on the right track, but we know we have more work to do, especially from the business business owners around the regulations. So, Ms. Martin, I I would like to start with you. Since nineteen ninety seven, we've lost more than half of our public companies. Did regulation in your opinion play any part in this, half of our public companies?

Thank you so much for your question, Congresswoman. Um, In my opinion, over-regulation is one of the factors that have contributed to the forty percent decline in the amount of public companies. And as a result of the streamlining of such regulation, we're starting to see many companies come back.

So that's a good thing. We're on the, we're we're digging out of again an over-regulatory mess, where Um, some people think government is the best use of, of their taxpayer dollars. So I appreciate that. I mean, as a business owner myself, who started a business, with all the regulation that we have now, I gotta be honest, I don't know if I would have been able to afford to start my business. And that's real concern. The red tape, in my opinion, has gotten way out of control, and as um, a Michigan manufacturer can spend millions in compliance, before raising a single dime, then millions more every year just to actually stay listed. To me, that's crushing a company's ability to growth. I mean, I look in my own business, we spent more money and resources in our compliance department than we did our customer service department. I think we need to flip that a little bit. Um, I, I, it's very, very concerning to me. I mean, I think it means more and more Mis- Michigan businesses are selling out, instead of going public. Now, what does that mean for Michigan jobs? That's my concern. I'm trying to bring jobs back to Michigan. Is it a safe assumption that over-regulation defeats that purpose?

Uh, over-regulation does uh a couple of things. Number one, it puts additional burdens, as you rightly out on companies um from a governance perspective. Uh it also lessens the amount of public companies that the Main Street investor is able to invest in and we're incredibly optimistic about the various moves that have been undergone to address not only the fact that there are fewer public companies, but then also investment opportunities.

And I applaud this Congress and the work that we have done to, um, roll back a lot of those burdensome regulations. Yes, we need guardrails, but I'm so excited to see this Congress and this administration actually put its faith back in people. Cuz that's where it belongs, is back. to the people, right? We are a representative government of the people. Let's have some faith in in the people. So again, I applaud this Congress, I applaud this President, and I applaud our Chairman. Um, one of the many changes i i uh i the Invest Act does is let growing companies test the waters so to speak, confidentially. What I'm curious in your opinion is what does that mean for a Michigan business looking to make the leap.

Uh, I think it streamlines without going into any specific piece of the legislation, although I do congratulate this committee's bipartisan efforts to to move that legislation forward. I think it gives companies the ability to tap the most vibrant, most transparent forms of liquidity, which is our public markets. sooner.

And isn't that our goal, right? The Invest Act cuts burdensome red tape, putting the American dream back in the hands of everyday people. It passed the House overwhelmingly. Now it's time the Senate did the same thing. And with that, Mr. Chairman, I yield back.

Gentlewoman yields back. Chair recognizes the gentlewoman from Michigan, Miss Pleib for five minutes.

Thank you so much, uh, Chairman. Uh, people are the purpose of our economy. Who said that? Professor Hamilton,

Yes.

uh, I I I believe in that, I believe that's why I am here. Um, and, you know, one of the things that investing in our people, you know, strengthens our economy, that's so common sense, and if you talk to American people across political backgrounds, across the state, south, west, east, coast, they would all say, " Yes, we should invest in people." But we don't do that here. Um, like everything that we're talking about in strengthening our economy is about banks. about regulations, about which regulations protect our our folks from getting scammed. These regulations didn't come from the sky, it was because we had to bail out banks and we had to bail out all these folks, like it didn't come up because we're trying to be mean, it's because you all need to be put in timeout or be punished uh for the fact that you continue to scam the American people. But I think w no one ever talks about it. We talk about small businesses, of course, and all the, but what about investing in people? And so I introduced the Economic Dignity for All agenda. You know, it is the End Child Poverty Act. You know, it's like Earned Income Tax Credit on steroids. You know, EITC, Earned Income Tax Credit, was bipartisan. It was one of the most successful anti-poverty programs. But it's a lot of that money stays on the table because not everybody files federal returns, right? And so then we also have the Baby Bonus Act. I think, uh, my colleague from uh Boston, uh, Iana Presley, ju Congresswoman Iana Presley just talked about the baby bonds. And we also have the Boost Act. Again, all of that continues to be as close as we can to universal basic income, but people are like, oh no, we can't do that. And and, you know, I would like to submit, Chairman, though, um, uh, an article that's a a study, a universal basic income could grow would grow the economy.

Without objection.

And it would grow the economy, cuz when you invest in people, economists will tell you they spend it right back into the local economy. They don't hoard it like the banks do. They don't hoard it like the corporations do. So it it is mind-boggling that we're talking about growing the economy, yet, In the last uh, you know, they call it the, I call it the budget betrayal bill, we had eighty-eight companies not pay, they paid zero in taxes. Now, when I see companies, my residents in town halls look at me, they think I'm like talking about the mom and pop shops down the street. Nuh-uh. I'm talking about Tesla. Tesla reported zero basic income and they made five point seven billion dollars. How come they're getting a tax break, my my our folks are not? What are what about investing in people, why are we investing in Tesla? Uh, Southwest Airlines. They they they literally uh uh paid zero in federal income tax. I think uh they achieved zero tax result on on almost four point three billion dollars. Now the basic tax break, they're supposed to pay like twenty-one percent, right, on their corporate profit. They paid zero. Nothing comes back. Then you got like these products that have like uh are a company that owns like KFC, Taco Bell, all these places. One billion dollars. They paid zero. and any of their profits, zero taxes, any of their profits. Yet here I come talking about child tax credit, uh, you know, the the Boost Act, and everybody said, " Oh no, we can't do that." Yet we're doing it for these companies. But first, Hamilton, I don't know how to explain to my colleagues, investing in people is strengthening our economy. It is, it is so clear from study after study, not the banks. The banks hoard it. They won't even give my folks loans for houses. That's why the the the the homeownership is decreasing, not only in my district but all across the country, in the high cost, the price gouging, everything that happens. It's just corporate greed is out of control. So Professor Hamilton, if you were me and you got my job right now, how would you tell my colleagues how important it is that investing in people and investing in agendas like economic dignity for all which in the past used to be bipartisan We used to invest in people, not just corporations and LLCs and these other things, and including positive positive whatever these schemes that I continue to hear about, with uh folks, you know, cryptocurrencies now buying literally apartment buildings in my district and I can't find out who do I hold accountable.

Yeah. I I think uh the clarity is start with the simple but fundamental question, what is the purpose of an economy and it should be people. The second part, you used the word trust, uh when people are properly resourced, They're not just charitable entities, they produce, and then they do generate positive macroeconomic multipliers, and we have strong empirical evidence to make that case. And the point about banks and the other industries, they are tools to fulfill the purpose of empowering people. They are critically important, but they are the tools to enrich the point and purpose of our economy, which is the American people, and when properly resourced, we have seen

that not only do they generate economic prosperity, they generate peace, tranquility, and all the other values of a well-functioning democracy.

Thank you, I yield.

Thank you. The chair recognizes the chair of our subcommittee on digital assets, Mister Stile of Wisconsin, for five minutes.

Thank you very much, Mister Chairman, Mister Tarbert, I wanted to start with you, really enjoyed your testimony in particular about dollar statecraft. Um, I think we did a great job in moving uh the digital assets, stable coin legislation through the Senate, through the House. I chair the subcommittee on digital assets. Um, we're working with the regulators to finalize that, but we're seeing a real uptick in particular in the global south. Uh, I was recently talking to individuals involved in the finance ministry in places like Argentina, where they're seeing a significant uptick in the use of US dollar backed stable coins, the potential to have a US regulatory regime, driving that forward. And then I think what you do a great job of is explaining actually the connection of why does someone in Kenosha, Wisconsin, give a hoot whether or not an individual in Argentina, Zimbabwe, uh Kazakhstan is using a US dollar backed stable coin. I think your testimony actually exemplifies this about the importance. Could you add some color as to why that actually makes life more affordable for somebody in Kenosha, Wisconsin when an individual outside the United States is using a US dollar backed stable coin or a US regulatory regime?

Well first of all, thank you, thank you so much for your leadership. Congressman style on all of these issues. And in some ways this h- this hits a little close to home because as it turns out, my brother and sister-in-law and their two young daughters live in Kenosha, Wisconsin. And and the reason of course is that the more dollars we have out there in the world, the more people are using the US dollar. In the global south, in in Asian financial markets, um the the more the dollar is the world's reserve currency, and therefore borrowing costs are low. borrowing costs are low here for the United States, but that is passed on to consumers. So, uh, the price of gas in Kenosha, and it actually is a much cheaper by the way over the border in Wisconsin than in Ill- Illinois where I live, that actually

Never too late to move north.

That that that is related to the fact that again, the dollar is the world's reserve currency. And so all of the borrowing rates, the fact that the United States enjoys that because there's demand for the dollar, all of that comes to citizens everywhere. including there in Kenosha.

So it shows up in the price of oil. What does that do if somebody goes to buy to get a home loan, the ten year treasury, uh, obviously connected to to a thirty year home loan, so somebody wants to go buy a house, you uh wise up, you move from Illinois to Wisconsin just north, uh, you go and you get a home loan, or a regular f- person does, uh, who's employed in the great state of Wisconsin. What is the impact on somebody getting a home loan if more and more people are engaged in in US dollar back stable coin again outside the United States?

Yep. All things being equal, that rate is lower. But what you would see is that if we lost the reserve status, if we lose uh the dollar, and that's why dollar state craft is so important, the consequences would go throughout our economy and be borne by American families and workers.

I I wanna stay on the the stable coin piece for a minute, in particular, gentic AI. Um, this is something that it could be transformative, we're all kind of looking and exploring and trying to understand this. How important is it to have a US regulatory regime ab b with US dollar backed stable coin as its focus as we look at uh potential growth and development in the agentic AI space.

It's absolutely critical uh which is why the Genius Act is critical and why the Clarity Act is critical as well.

What would happen if we didn't have it in place, right? We we had a lot of discussion in this room about whether or not we should provide rules and regulations in place protect consumers make sure that things are operating under a US regulatory framework what would happen if we uh if we had not passed genius let's do the counterfactual

Yeah.

Um, and Agentic AI begins to pick this up. What's the what would have been the risk to you as consumers?

I'd say two big risks. The first is, the dollar could be used, but it wouldn't be dollars that are held to the same standards of the Genius Act. They could be offshore dollars that are backed noth by nothing, and essentially put the global economy at risk, as well as the undermine the dollar itself. Second big risk would be another currency other than the dollar takes place. We know there are strategic competitors out there that would more be more than happy to have their own digital currency and are actively pushing it.

Do you think there there should be more work done in in this broader space as it relates uh to um settlement triggers, smart contracts, uh as we think about Agentic AI and the use of US dollar back stable coins?

Absolutely. We're in the early innings, but it's important that we lead, uh, just like we've led in payment stable coins, just like we've led in the global financial system. Of course, Lynn's testimony is really important because you have the New York Stock Exchange moving into tokenization. Uh, and and so absolutely. Uh, a Gentic will come next.

I appreciate your testimony, I appreciate everybody uh for being here. I think there is real benefits to having a US regulatory regime and US dollar backed stable coin. Doesn't always show up immediately until you think about it, but it does show up in everyday living from gas prices uh to housing affordability. Appreciate all your testimony. Mr. Chairman, I yield back.

The gentleman yields back. The chair recognizes the ranking member of our

Uh, thank you, um, and uh, thank you to our witnesses. Uh, yeah, I think when they write the history of of this Congress, the notable achievements will be the bipartisan ones, uh, principally the housing bill. And I think that's important. It's our intention, I hope, to to try to, uh, carry that record forward in the next Congress. Um, uh, Mister Tarbert, I really agree that the dominance of the US dollar is a strategic asset to our nation. You mentioned in your testimony the dollar quote uh stands less on the pro on the proclamation than on the quality of the law and the institutions behind it. And the problem is, of course, that this ins administration is assaulting both of our laws both our laws and our institutions. You operate internationally. You know the international attitude toward this administration. They are horrified and they are disgusted. Now, when the president proclaims That in addition to his family's personal conflicts of interest, which he claims no one cares about, that he claims he will no longer enforce the Foreign Corrupt Practices Act, or the Corporate Transparency Act, that attempts to prevent anonymous shell corporations uh from operating in the United States does getting these statutes support an American economic dominance in the rule of law?

Well, ultimately it's a decision for Congress and the president. Um

Well, the president has decided not to enforce what Congress passed. Alright, does this help or does this hurt the reputation of the United States and the dominance of the dollar?

I think all things being equal, the laws that Congress passed should be executed, and executed well.

Right, and when that doesn't happen, it hurts American dollar dominance. This is not just me or not just Democrats. According to a survey of central bankers by the uh Monetary and Financial Institutions form, AMFISH, a record number of central banks plan to cut their dollar allocations in the coming decade. Uh, seventy-nine percent of central banks and sixty percent of public funds, believe the monetary, the global monetary shifting is transitioning away from a dollar-dominated system to a multipolar world. Uh, so this is happening and it's happening because of the actions of this administration and it is a mortal threat to the long-term economic health of our country. Uh, how do you believe we should respond to this? Um, you know, uh, mis- Mr. Hamilton, uh, Professor Hamilton, what what's the right answer to that?

I I think you're absolutely right. Uh, I think uh more broadly trade wars, physical wars and vulgar diplomacy is not helping the dollar or hurting the dollar. I think that um, you know, I'd go a step further as we think about stable coins and other other competing forms with our US treasury. I think we need to be careful there as well. I think part of the reason the dollar is strong is if there is a case for monopoly with regards to currency, That is where the US government should have a monopoly.

Yeah. And and thank you, we were just talking earlier about um, agentic AI, which everyone agrees is gonna sort of uh dominate. And when my agent starts talking to your agent, the very first question that it asks is who the heck are you and uh how do we know that? The the agentic identity is crucial and that's actually holding up a lot of progress in getting that in. But if the answer for this agent I'm talking to is oh, I represent an anonymous shell corporation. How can that possibly work? You need to have a legally traceable person behind uh every agent that's uh attempting to operate in finance. Uh and so the it's another thing that's is being hurt by the president's refusal to you know operate with the basic uh principles of business integrity in his personal finances or in the in the laws he's deciding to enforce. And and that hurts. Um yeah uh uh let's Miss Miss Martin, you know the integrity of our markets are crucial. And when the president announces that his private social media thing is going to release information based on uh, based on uh, you know, give early access to some players who are willing to pay for it, uh, based on his official actions that he's taking in return for, you know, many tens of thousands of dollars, uh, uh, I think a month as a subscription, does that, do you think that generates confidence in the integrity of the US markets?

I can't comment on any specific product.

OK. So you you can't comment. Do you have an opinion? Either you have to give it, do you have an opinion, or do you think it's just OK?

I think at the New York Stock Exchange we take our rules and the enforcement of our rules very seriously. And that extends to nefarious behavior in markets, but I cannot comment on the specific product you mentioned.

OK. Yeah, there's Grant and Sherry, you know, and when I visited you when you were running the CFPB, I I thought, okay, you were a conservative but you were doing a decent job of running a a quality organization that that really helped a lot of American consumers. So how did you feel when you saw that uh the Dojas and Russell both had the intention to reduce the CFPB to five people and a telephone?

Uh Congressman, the CFPB was given an important mission by Congress, uh but Congress also insulated it from oversight that is critical, like the power of the purse.

Time has expired. The chair recognizes the gentleman from South Carolina, Mister Timmins, for five minutes.

Thank you, Mister Chairman, and thank you, the witnesses, for joining us today. The work done by our committee this Congress has made clear that Republicans in this administration are focused on finding solutions that deliver for the American people particularly in financial services. Our work on innovation in digital assets is helping ensure that America remains the global leader in financial technology. By providing regulatory clarity and embracing emerging technologies, we are creating an environment where businesses can invest, grow, and create jobs here at home. This is about keeping America competitive, strengthening our financial markets, and making sure the next generation of financial innovation happens here in the United States. Uh, Mister Tarbert, let's start start with you, uh this Congress has made significant progress in establishing the rules needed for the United States to lead in digital finance. The Genies Act has established a federal framework for payment stable coins, and the House has passed Clarity Act to provide greater certainty around digital asset markets. Now these efforts are giving innovators and financial institutions clear rules of the road and help ensure the next generation of financial, financial innovation happens here in the United States. My question is this, you've spoken about the importance of stable coins and digital assets to the future of the global financial system. As other countries move quickly to establish their own digital asset frameworks, how important is it for the United States to provide durable regulatory certainty so American companies can compete globally and ensure the dollar remains at the center of the digital financial system.

Congressman Timmins, thank you for your leadership. It is absolutely critical.

Ha ha couldn't agree more. Uh you've served uh as both CFTC Chairman and as Senior Treasury Official, including a time when policymakers were still working through how digital assets should fit within our financial systems. From your perspective, how does the approach today compare with what you saw during your time at Treasury and the CFTC, And how would clear lines of regulatory authority help the United States compete on a global scale?

Well, it's far better uh than the time when we didn't have the Genius Act, for example. The Genius Act being passed gives Congress's policy decisions to the executive branch to execute, and execute faithfully, uh and ends a lot of the confusion as to what's classified as what. And that's why the Clarity Act, to your point, is so important, because there's still uh considerable confusion out there as to what is a security versus what it as a commodity, the regulators are doing their best. But in the absence of clear direction from Congress, it's pretty difficult. And the American people, I think, look to Congress to make these core policy decisions and create the framework. In other areas, the they simply don't have the rule-making authority because they don't have the jurisdiction. CFTC for spot market for digital commodities, for example. So there's no rule-making at all to be done because they simply don't have the jurist

Well it seems that things are moving in the right direction, so we gotta continue the work that we're doing. Um, on to housing. Um Through the back and forth with our Senate colleagues, we were able to advance bipartisan legislation focused on one of the most fundamental challenges facing American families today, the shortage of housing. The twenty-first century Road to Housing Act became law this year, with provisions focused on increasing housing supply, streamlining the development process, modernizing federal housing programs, and improving access to mortgage credit. Uh, Mister Pollock, given your decades of experience in housing finance and your time at the treasury department, I would like to get your perspective on the challenges that remain. As with any major piece of legislation we work on in Washington, one of our biggest responsibilities is explaining to the families in our district how the work we do will actually benefit them. Now that the twenty-first century Road to Housing Act has been signed into law could you highlight some of the provisions in this bill that you believe will have the greatest impact on housing affordability and new home construction, Particularly for families and communities in my district back in South Carolina.

Thank you, Congressman. Uh, we mentioned before in general uh the the attempt to streamline um uh approvals studies uh and regulation which will benefit everybody. Uh, uh a particular uh case on the affordable end are the provisions around um uh around m- mobile homes or manufactured housing which should I I think should have a material um effect there. The the um the bill contains a lot of studies of interesting ideas. I think going forward it'll be important to follow up on those studies uh and have the Congress exercising oversight on uh on how they're doing and how the various reporting uh re uh responsibilities on the regulators, which are uh are uh provided in the act are followed, uh are followed up on. Um one thing about housing in general is, as I said before, we are still in the aftermath of the great second house price bubble of the United States in this century, and we're gonna have to live through that. I think there's gonna be a downward uh pressure

Gentleman's time.

Thank you for that. I'm out of time. I yield back.

Thank you.

Appreciate it.

on pr on house prices that we all confront.

Thank you. The gentleman yields back. The chair recognizes the gentleman from California, Mister Liccardo, for five minutes.

Uh, thank you, Mr. Chair. Uh, Mr. Pollack, I appreciate your focus on the bipartisan efforts to address the housing crisis in our country. Uh, and those efforts were far from perfect. Obviously, there's much more work to be done and but in this very divisive political moment, it's it's notable. Uh, the fundamental assumption I think of that effort since I was part of it and I'd forward bills in the package, it was that building more housing is a good thing to address the affordability challenges that millions of Americans face. Is that is that fair?

There's a definite emphasis on supply,

Yes.

as we said before, and not just pumping up demand. Yes, Congressman.

And and your think tank, the Mises Institute, describes the Austrian school of economics, uh, which emphasizes individual freedom, uh, somewhat some might regard as conservative values. Is that fair?

The uh Mises Institute is named after Ludwig von Mises who's the founder of the Austrian school that emphasizes human freedom, um uh voluntary choice to the advantage of markets. Yes.

My my apologies to him for mispronouncing his last name.

I didn't mean to be correcting you.

Um The good news is there are issues across the ideological spectrum that many economists agree upon um for example higher cost for construction materials could hurt housing affordability. Is that fair?

It sounds fair to me, yes.

Uh, housing higher fuel prices could also undermine housing affordability because of the costs that are born through construction. Is that fair?

Uh, congressman, I'm not sure where you're going, but higher prices in general and inflation, uh, hurt the functioning of the economy,

Sure.

which is why we need to work for sound money. Maybe we can agree on that one.

And and high interest rates also undermine housing affordability.

Interest rates are a market uh effect. Interest rates go up and down uh with supply and demand. They're a price and prices need to be adjustable.

And so higher interest rates will undermine housing affordability.

Uh, higher interest rates make mortgages more uh uh expensive,

Expensive? Yes.

but lower interest rates can also cause housing to be more expensive.

Through the price?

As

Yes.

through when they're when they're abnormally suppressed as they were,

Right.

uh, for a decade, the result ironically, uh, you're trying to make things cheaper, you end up making them more expensive,

And

in houses in particular.

Yes, and shortages of of construction labor also undermines housing affordability. Is that fair?

Sure.

Uh, and so we have an effort by this Congress in a bipartisan way to address housing affordability. Um, and we have an administration uh, that has driven up tariffs on materials like steel and Canadian wood. uh has driven up costs for fuel uh with a war without any clearly defined strategic achievable objective. And those costs undoubtedly have borne um some pain through higher construction costs. Is that fair?

Uh Congressman, as uh as the um uh Austrian school would say, the closer we can get to competitive free markets, the better a resource allocation and the better uh the people all better off the people will be.

And and tariffs and wars probably are not our friend in that effort.

That tariffs are not that.

Yes. And uh running large federal budget deficits could crowd out private sector borrowing, that could also drive up interest rates. It's fairly uncontroverted.

The uh yeah, as I said before, the uh interest rates are a price, they they reflect supply and demand.

And this Congress with this administration just added more than four trillion dollars to our debt uh by accelerating that borrowing.

The uh the the debt is a the debt is rising, but the debt is a uh a heritage of very many administrations

Agreed.

and very many and very many Congresses.

And certainly this administration

Oh, that that has been a bipartisan effort, Congressman.

Yes. But that debt has doubled since Donald Trump took office in twenty seventeen, uh sixteen, excuse me, seventeen, thank you. Um, and and the shortages in construction labor, uh, I think certainly you've seen plenty of news reporting from states like Texas, uh, where, uh, the construction industry complains that they are suffering substantially around a lack of, uh, labor because of chaotic immigration enforcement.

Well the, uh, the chaotic immigration laws were definitely a bipartisan Uh, if I have to say principally democratic,

Understand, but I said enforcement specifically.

problem, congressman.

We could all agree there are plenty of lost effects, but we've seen uniquely chaotic ice enforcement. Is that fair to say?

Well, he has certainly seen enforcement of the law followed by un-enforcement of the law.

Well,

And there and there we are.

I I would say then we have a pretty strong record for this administration in undermining housing affordability on virtually every score. Thank you. I yield.

Gentlemen, yields are back. I recognize myself now for five minutes. Um, thank you all for being here uh today. And uh I wanna jump into something that I think is important for expanding the investor base, and that's the Invest Act. Uh, this committee's been clear that the current accredited investor definition gate keeps private markets by wealth and not by knowledge. And I'd like to ask Ms. Martin and also, Mister Hamilton, uh your um your opinion as well, but by letting investors qualify on financial expertise instead of net worth, how does the Invest Act give qualified Americans a real shot at high growth private companies and let their retirement savings drew alongside institutional investors? Miss Martin, start with you.

Well, unfortunately, I don't have the details of the act because it's a not just about the idea, it's about the mechanism in which you achieve that idea. But from our perspective, expanding access to companies, public companies, private companies, investability, as long as it's coupled with transparency, is a good thing, because our North Star, the New York Stock Exchange, is to enable people to invest, to invest in companies at various stages. We think the right mechanism for that is our public markets, and ensuring that the companies, the most innovative companies, have a clear path towards going public in the most transparent fashion possible.

So, I mean, you you believe though, you know, with the right parameters and guidelines, giving more people ability to participate is good.

Absolutely. Um, from our perspective it's also about investor protection. One of our hallmarks is investor

Sure.

protection, ensuring that if I place my retirement savings into the market, I want to ensure that it is protected from bad actors.

Sure, absolutely. Mister Hamilton.

I'm also gonna comment that I don't have all the details, but the this the broaded principle of expanding access in and of itself is a good idea. as long as we're also attuned to some of the lessons that that access can be exploited as well for uh those that are uh more vulnerable.

Do you feel that there are folks that are boxed out right now under the current guidelines and and uh rules that we have?

Yes, uh d- d- yes in a in a simple answer, but again I think we have some clear lessons of the past of when we've expanded access without the right guardrails, and then it turned into exploitation.

Sure.

The subprime mortgage crisis would be one example.

Thank you.

Mm.

Um, I wanna jump back to uh um the road to housing. Uh, this committee recently delivered a major rel- a major relief for American homebuyers by enacting the twenty-first century road to housing act. This law addresses something I hear about frequently from my constituents in northeast Indiana. Government red tape, complex regulations, uh that's uh that are you know come from the environmental reviews and the permitting process, and that's why we introduced the streamlined rural housing act um which became law part of this package. Uh, Mister Pollock, I'd like to ask you, how will roads permitting environmental review reforms create a meaningful difference for those looking to build or buy a home?

Uh, Congressman, I'm sure it will help. Um, in general, a lot of regulation starts off with all good intentions, over time, complexifies itself, grows more expensive, and I think it's essential for the Congress from time to time to review that, and take steps to bring it into balance, uh, as in my opinion this act did do.

Good. Mister Hamilton, I'll throw that to you as well. I don't know if you're familiar with some of the housing reforms that we made, but, you know, again, I mean, the trying to relax the ability for people to get into a home is is important. What are your thoughts?

I applaud the Congress on the values of

If we do that though, don't we push prices higher?

It depends on to whom you offer it to. So there are ways in which you can make it and targeted specific ways to, uh, provide access to those who otherwise wouldn't have it.

Yeah. I think, you know, trying to drive the cost down is important, cuz we've seen this inflation over the past five years, cuz all this money coming from Washington kept coming into the system and just drove prices higher, you know, and and I think that uh while the economy we have certain challenges I also see the fundamentals being very good. And I think if we can in in enable Americans to build their own at a lower cost, that's gonna benefit all of us. My time has expired, so at uh this time a thank you to all of you. Uh the the chair recognizes the chair of our subcommittee on oversight and investigations, Mister Muser,

Thank you, Chairman. Thank you all. Uh, great, great panel. Really appreciate it. Under Chairman Hill's leadership, um, the Financial Service Committee, our committee has advanced many pieces of legislation, including the Main Street Act, the Capital Act, the Genius Act, the Twenty-Fourth Century Road to Housing Act, and the Invest Act, which support long-term economic growth, financial stability, and provide a higher level anyway of certainty for investors and consumers. Uh, together these, uh, efforts reflect committee's commitment to moving financial policy away from a biased government driven market distortion and towards supply side growth, capital formation, expanded access to capital, and as we say, uh, make doing our best to make community banks great again. So, uh, Miss Craninger, uh, my safe guidance act, which was included in the Main Street Capital Access Act, ensures transparency and limits abuse of regulatory guidance by requiring regulators to include a disclaimer on the first page of any guidance document that makes clear this is guidance and is not law. How will this and other provisions in the Main Street Capital Access Act translate into relief for lenders and allow them to focus on responsibly deploying capital?

Congressman, thank you so much for your leadership in that in that area and on the bills. Uh, we would certainly welcome seeing the Main Street Capital Access Act uh become law, and particularly for that reason, it is um, I think, a a huge challenge of recent years. that regulators were asserting guidance documents were, you know, the for had the force of law when those are non-binding doc documents by definition. So we cannot have a situation where those expectations are not going through the notice and comment rulemaking process and are not being, uh, established requirements, uh, as opposed to guidance.

Thank you. Uh, as well, I wanna ask you, um, Travis Hill at the FDIC at the FDIC began efforts to index certain regulatory thresholds so that they do not become more restrictive, IE, you know, based upon inflation, simply because the economy and banking system grow over time. Do you believe the regulators are moving in the right direction with such plans?

Absolutely, and and Chairman Hill uh Travis Hill has certainly done a lot of work in that effort uh in other areas as well, uh the other regulators have. The indexing, uh you know, we have regulatory thresholds that were set nominally in the nineteen seventies and really do not have any bearing based approach to regulation today. So appreciate the focus of Congress on indexing.

Good. Very good, thanks. Uh, Miss Martin, uh, one concerning trend we saw under the Biden administration was decline in US IPOs, as you mentioned. The trend is reversing clearly, sixty-five IPOs, raising approximately a hundred and fourteen billion dollars in the first half of twenty twenty six, nearly double the number and more than seven times the capital raised during the same period last year. In your opinion, what has been the biggest contributors to this trend, And how can the Invest Act address those issues?

Well, thanks so much for your leadership and the question, Congressman. Um, the biggest area where we've seen, I would say the biggest catalyst that we've seen for the IPO markets returning has really been the confidence the confidence that these companies can raise the capital that they need to fund the operations. And to your point, the records that we're seeing really point to the fact, point to the success, depth, breadth, liquidity in those markets. And it's a trend we c- continue to believe um will will be seen for the medium term here. Um we're incredibly optimistic about this, not just because it allows the most innovative companies to raise the capital that they need, but it also allows the main street investor to broaden out the investment. in these incredibly innovative companies, companies who are really building the future of America.

Good. So you s- you think these trends will continue?

We believe so. We're very optimistic about the second half of this year and actually now moving into twenty twenty seven.

Yeah. Sure.

Um, and I think it reflects the health of the underlying markets in particular.

Good. I I I agree. Um, Mr. Tarbert, uh, the Genius Act Uh, how has the Genius Act been a game-changer for stablecoin issuers, and can provide some insight on how uh it will be uh impacting everyday consumers using stablecoins and then maybe in limited time comments on the importance of passing the Clarity Act.

Yeah. So, thank you so much, Congressman. It's uh been absolutely critical, because now you're starting to see the Genius Act encourage folks to do things the right way through transparency through backing one for one all of that can protects consumers, but it also makes our financial system stronger. Uh, and then we're starting to see uh adoption of stable coins in all sorts of ways, including uh as credit card settlement, and therefore reducing the fees that consumers and small businesses pay. Uh, but that said, it's we gotta finish the job. Clarity Act is all the markets above that dollar layer, and it's critical that we get that passed.

Excellent. Uh, my time has expired. I yield back, Mr. Chairman.

The gentleman yields back. The chair recognizes the gentleman from New Jersey, Mister Gottheimer.

Thank you, thank you, Mr. Chairman, and thank you, ranking member Waters. Uh, finding ways to modernize and expand certain aspects of federal deposit insurance remains an important priority for me. This will help ensure that small businesses remain stable, and Main Street is able to economically thrive. It remains important that we find an equitable solution to deposit insurance. Miss Kraninger, the deposit insurance fund is supposed to maintain a reserve ratio of at least one point thrive one point three five percent, of insured deposits, and it's been knocked below targets before. from your members' perspective is the fund on sound footing today and are the assessments being calibrated in a way that keeps it healthy, without penalizing well-run community banks.

Yeah, thank you Congressman for the the question. Uh, deposit insurance obviously is fundamental to uh our banking system and it it's been an important protection that that consumers have come to expect. And that banks um obviously pay for that through the assessment process as you noticed. I know that uh Chairman Hill has been reviewing this and and i do believe there was a recent uh proposal on the assessment process but i get get back to on the uh exact specifics of that at the moment i'm not recalling the the details of it but i know it is something that that matters and and we're looking at it and then also of course ensuring that um the assessment is appropriately appropriately calibrated to the risk and size of the institution.

thank you very much families in the great state of jersey where i'm from or feeling squeezed from a lot of directions at once and a big part of it is the economic uncertainty right now the national debt just hit forty trillion dollars and at three billion dollars a day in interest the bond market is done being patient and every american family pays for it in higher mortgage and credit card rates and higher uh interest rates overall car loans everything working families borrow for on top of that energy prices swing on every geopolitical headline miss martin from where you sit watching the bond market everyday how much of the borrowing cost pressure Americans are feeling traces back to our fiscal trajectory. And what does continued deficit spending combined with volatile energy prices mean for market stability and for the cost of everyday life, over the next few years?

From our perspective, our job is to ensure that the markets remain open and as efficient as possible to allow individual investors, institutional investors, to manage whatever risk, whatever macroeconomic risk they have on their books as efficiently as possible. So trade certainty, efficient risk management are incredibly important. It's actually why we've invested so much in our infrastructure, because volatility hits at a moment's notice, and our job is to ensure that markets remain open and transparent because we believe for the medium to long term, the uh value of your investment will continue to accelerate.

Thank you. Uh, it is clear, and switching topics here, that AI is advancing at a rapid pace. If we get it right, it can be a net benefit for all Americans and help ensure the US stays ahead of China. But I believe we need proper guardrails to protect workers and our economies, that it serves as a tool to make people more efficient and safer, uh and of course looks out for our national security. Doctor Hamilton, uh we're already seeing AI used on the factory floor to catch hazards before they cause injuries. take the most dangerous and repetitive tasks off workers' plates and uh try to boost product productivity where is the afl-cio seeing ai deployed in ways that benefit workers and how do we insure that workers actually do benefit across industries uh from this technology and don't just find themselves out of work or or have their protections exposed

and i wanna be careful that i'm not giving the official afl-cio stance i'm offering from my perspective and i think afl-cio along with workers in general are very active in trying to do just that, to utilize AI as a tool to facilitate better workplace, more productive workplace, and not exploitive workplaces.

Are you finding that it's other places where you're thinking it's helpful, and are it was a more, is it more risks at this point than benefits? How are how are you all seeing it?

Well, I think right now we don't have the right governing structure to redefine AI, and and ways to facilitate people right now. we have like a bull approach of facilitating ai and power without the proper guardrails. But with good regulations, with a redefinition, I'm with you in the sense that ai is not doom and gloom, ai can facilitate the capabilities of us to thrive.

Thank you. Uh, with tariffs, with a fifty percent tariff on certain Canadian products, Miss Martin from your seat at the New York Stock Exchange, you've a real-time view of how this is affecting companies when a company faces a sudden cost increase, like a fifty percent tariff, what do you see them absorbing it or passing it on to consumers? What are you seeing right now with given all these tariffs?

I can't really comment on how any one company is treating this, I'd be more than happy to follow up with you separately to discuss it in detail.

I'd love to talk to you about that if that's okay. Please thanks yield back, thank you.

The gentleman yields back, the chair recognizes the gentlelady from California, Mrs. Kim, for five minutes.

Thank you, Chairman, and ranking member. for today's hearing and i wanna thank all our witnesses for joining us you know um early this year one hundred and fifty californians were shocked when they received mail from the county saying their property tax payments had not been received even though they had been mailed on time it was eventually revealed that fraudsters had stolen their checks they washed them and they stole their hard-earned money and leaving them with notices on their property taxes. Thankfully, my constituents in Orange, Riverside, and San Bernardino counties were unaffected, but these thrusters, they get bolder. And we need to take proactive action as a result to prevent these kinds of schemes. So that's why I introduced Stop Payments Fraud Act, to empower banks to be able to identify those check and while fraud to stop Americans' hard-earned money from being stolen from them. I'm not sure if you had a chance to review the bill, but we were trying to give the financial institutions additional time, when there is a red flag, to be able to go after these to protect our uh, you know, hard-earned dollars. So, Miss Cranger, um, how does giving banks more flexibility to identify check and wire fraud better protect consumers? And maybe you can also talk about, you know, like we have novel technology. like digital assets, blockchain, payment rails. So why are fraudsters targeting checks and wilds?

Uh, thank you, Congresswoman, for your leadership in this issue. We, fighting fraud and scams is a significant issue for the financial services, um, industry and and consumers, and frankly all industries. Um, they're all being implicated in in the fraud that's undertaken today, and we're seeing it in many different vectors, as you noted, Going back to what people are surprised by, check washing, something that we have dealt with uh periodically over time. Um fraudsters are gonna go at whatever they can most easily uh and cheaply do, like anything else. They they like to run an efficient operation, and so we need to make that harder, we need to raise the bar. Uh in fact the leadership to try to um phase out check payments uh is also something that that we welcome. I mean we recognize there are many consumers who still use them but we need to to phase that out. So it is important. And as you look at the uh, we've talked a little bit about AI at this hearing too, the changes in technology are gonna make that fraud even greater.

Right.

So your bill is hugely important, holds work, uh the ability for financial institutions to pause and take a look at those transactions but a lot of other things that need to happen too, including trying to stop um those fraudsters from even accessing consumers to begin with.

And it's pretty much the vulnerable population, especially those uh senior citizens who continue to still receive their um social security checks through you know regular hard checks, versus many of them even though they transition to receiving their checks uh you know, direct banks uh deposits. So uh as they continue to use those checks and wires we definitely need to advance legislation like mine to protect those communities and prevent those fraudsters from continuing to store steal their hard or dollars. Um, I want to uh focus on the impacts of the genius act and the work that this committee has done to unlock the benefits of digital assets. So, mister Tarber, I wanna uh speak to you, as we continue to unlock innovation, it is critical that this innovation is centered on maintaining the dominance of US dollar. So almost every single stable coin is minted in US dollars. Uh, so what are the damages if fail to continue to unlock innovation and a foreign alternative takes over the stable coin issuance.

Well, thank you for your leadership on all of these issues. Um, it it could be potentially very damaging to this nation if the dollar and genius-act stable coins, uh, uh, do do not rise and and become, you know, the dominant currency on what we call the internet financial system. Uh, so Number one, the genius act sets that global standard, so the dollar is strong,

Mm-hmm.

everything is back one for one. And it also ensures that the dollar will be maintained, and US law will follow that dollar everywhere it goes.

Can you just talk about some of the uh the benefits uh stablecoins um give to the American businesses in terms of making payments and settling uh transactions more efficiently?

Stablecoin allows you to send a dollar as easily as you send an email, uh, safe, secure, and instantaneously. And so what that does is it redu- it reduces the friction of sending money, number one, the time, businesses don't have to wait two to three days to get their money and consumers, and secondly, virtually no fees. So all of those interchange fees, two, three percent, that can really eat into a small business's profits, go away when you use stable coins.

Thank you very much. My time's up. I yield back.

The gentlelady yields back. The chair recognizes the gentlelady from Georgia, Miss Williams, for five minutes.

Thank you, Chairman Hill and Ranking Member Waters for convening today's hearing, strengthening the American economy. So let's talk about it, y'all. Professor Hamilton, I'm gonna have a few questions for you, so let me start with three numbers. In Metro Atlanta, median rent is now over seventeen hundred dollars a month, and I know some of you are thinking, that's not that much. But come to the South and you're expecting low rent, y'all? You're ex expecting to live an affordable life. Gas is pushing towards five dollars a gallon, and this year, for the first time in three years, real wages actually fail. That means paychecks by less than they did twelve months ago, and more Americans are continuing to experience more month than money. Republicans, my colleagues here, they wanna pat themselves on the back for this economy. And sure, if you're in the financial district in New York City or Silicon Valley, It's been a great run, but that's not who I'm thinking about when I'm making decisions every day as a member of the United States Congress. I'm thinking about those families that called the Cab County home, Riverdale, Atlanta, where families are working full time and still falling behind, where families are choosing between gas money, groceries, school supplies, and using buy now, pay later products just to float them from one paycheck to the next. Why? Well, President Trump's National Security Advisor said, consumer pain over the Iran war is the last of their concerns. So, my questions are kind of simple. How has this economy, that my Republican colleagues are bragging about, actually helped my constituents and the greater broadly American people? I'd like to know from you, Professor, whether the data actually backs up their assertions. Professor Hamilton, the administration's tariffs have added about twenty five hundred dollars a year to the average household's grocery bill hitting staples like beef, coffee, and produce hardest. For a mom in my district doing quick mental math on the checkout line, she's not thinking about trade policy but whether she can afford groceries this week. What does the sustained policy driven increase in the cost of just feeding your family do to a household's ability to save anything at all?

The economy is trending down without a doubt, particularly for your your constituents. It's also missed opportunity. Uh, it is captured in our growth statistics, but also hidden because we don't disaggregate by distribution, those that are not doing so well. For example, New York City goes well beyond Wall Street. There are lot of people in New York City that could be doing a lot better if we had greater investments in different priorities. if we had priorities where we would literally put the American people first.

Professors, since this unauthorized Iran war began, gas prices have jumped more than fifty percent, and President Trump has told Americans paying more at the pump, just remember why. He's also kept tariffs in place that economists say are adding to fuel and shipping costs. For a working mom in my district driving thirty or forty minutes each way to their job, That's real money out of their pockets every single week. Can you speak to what this consistent price shock is like to a family?

Uh, there's uh instability with regards to whether we have tariffs on or off, uh but broadly speaking Americans are facing high prices and as you pointed out, wages aren't keeping up.

And that instability isn't just on families. I've heard from I represent a lot of large corporations based and headquartered right in Atlanta. And it's not about if they wanna pay tariffs, but let's have some stability so that people can plan and make project projections and that goes across the board. But finally, Professor, while families deal with all of this, my Republican colleagues marked up legislation to strip the Federal Reserve of its obligation to focus on jobs, cut the CFPB funding nearly in half, and move to cut its staff. This is the very agency that's supposed to stop people from getting scammed. And through it all, President Trump has called affordability concerns a hoax. That doesn't mean anything to anybody. Well, let me tell you. It means a lot to the people that I represent. Professor, when people are writing the rules when people writing the rules take the position that this isn't a real problem, what happens to families?

Yeah, I think the a big broad point is we don't ask that question for whom. We need to think about the for whom and make sure that it is inclusive. And as you pointed out, it isn't just families, corporations themselves, when they have instability, when they have uh in instability in high prices, it it reverberates.

Thank you so much. What I hear from you is what I hear from my constituents every day. This isn't about numbers on a chart, it's about whether a family can keep their head above water. Thank you and I yield back.

The gentlelady yields back. The chair recognizes the gentleman from Wisconsin, Mister

Thank you, Chairman. Uh, thank you for being here today. I know you've been here for three hours, so and I know there's some redundancy in the questions when you get to this point, but um to President uh Croninger, um I just wanted to dig a little bit deeper in to the area the idea that the regulators have already taken some steps to kind of tailor the supervision of community banks. Uh, can you just explain why it's

Congressman, thank you so much for that question and highlighting that important issue. It it really is true. What we need uh for you know the banking industry that is to serve our customers and our communities is that certainty and durability and as much as the regulators can go in and and i do believe they're doing a lot of the right things to try to recalibrate and right size regulatory thresholds the ones that they can um the next person coming into that seat can make a change and so having congress weighing in and recognizing the importance of having banks of all sizes of tailoring the regulatory regime so that the local communities can be served by bankers who understand them and can really drive uh local decision making and providing the credit needs of farmers and families and small businesses locally. It's a huge benefit of the American system and one that again Congress rightfully can can weigh in on and and thankfully has in several provisions in the bipartisan uh Road to Housing Act. and certainly then in the Main Street Capital Access bill, so we encourage continued action on those on those bills.

Thank you very much, Chairman, I'm gonna yield back the balance of my time.

Gentleman yields back, I recognize myself now for five minutes. I first want to thank you and everybody here for uh being here today. I think it is clear there is not a committee in Congress that has done more to address affordability in the one hundred and nineteenth Congress than the House Financial Services Committee and we've done it in a bipartisan fashion. Between the working families' tax cuts and the twenty-first century Road to Housing Act, we have delivered real results for the American people. I'm especially proud of the work we passed with the twenty-first century Road to Housing Act, which was the most transformative piece of housing legislation in decades. This bill was only passed into law because of strong bipartisan collaboration. It's the way Congress is supposed to work. Mister Pollack, in your testimony you also showcased just how much this bill I'm talking about will impact housing affordability and how it has reflected quote " years of bipartisan bicameral collaboration" end quote. However, there is more to be done to address federal government barriers to greater housing development. For example, my legislation with Rep. Goodlander and uh the Build Housing Affordability Act would temporarily pause the implementation of Build America Buy America Act on affordable housing until a study is completed on its effects. Then, once those requirements are returned, HUD would be on the clock to approve or deny waivers in ninety days. In your opinion, how would policy changes like this influence affordability? And are there other reforms you can think of that we still need to address?

Thanks, Congressman. I think you, uh, of course it's right, we gotta keep working on this. Uh, it's never done we have a long way to go to a really, uh, vibrant, um, uh, system with the, with the maximum affordability. I do have one particular item and it's something you and I have talked about in the past, and that is the ability of uh borrowers with old cheap mortgages who are now sitting on houses so they don't come on the market and it suppresses supply and and hurts affordability, whether those borrowers could in fact defee those mortgages. I don't know if you saw the last paragraph in my written test testimony, Congressman. But I point out that that concept which we have uh discussed and which Paul Kupiak, my colleague and I uh wrote on, we have discovered a company that's actually doing this uh in the American market, uh principally uh with uh mortgage lenders who keep the mortgages in portfolio. It's a good example of the community bank idea, and therefore can do creative things with their customers. Uh if you'd, if you were to be interested in that, I'd love to get you some more information on.

Well, I appreciate that, because I went down a rabbit hole on the idea of defeasance. And one of the challenges that I I I'm concerned about, because I do really like the concept, and I think it's it's working in countries like Denmark.

Yes.

But, and I don't know who this company is or how they're actually doing it, but are they how do they uh, how does that reconcile with the mortgage-backed security? I mean, if you're holding mortgage-backed securities and suddenly you think you've got collateral on X but you've really got collateral on Y, How do they navigate that?

It the the mortgage backed security makes it harder. This works actually with lenders who have the loan in portfolio and who can deal with their customers, uh and end up in a way where the customer gets the value of the mortgage. That is to say, you you basically can refinance that market as opposed to at par, but the but the uh lender is completely has all the same cash flows he had before. And maybe I I'd love to come see and talk about that,

Well that makes sense if that that makes sense if the if the lender is holding the

if you're right.

mortgage and they haven't put it on the secondary market, what percentage of of mortgage loans in America aren't touching the secondary market or the GSEs?

Yeah, secondary market is dominant, but there are still a lot of m there are still a lot of portfolio lenders and loans in portfolio to for which this this could be interesting is very new, it's just being introduced. But I think uh a a as a piece of uh development it's it's quite interesting maybe from

Well you are granted a fast pass to come into my office and uh explain this because I am intrigued by the concept. You know what I think is more important to me than anything about this Congress is that together with the leaders of the Democrats and the Republicans with the ranking member who is sitting to my right and our Chairman uh Mister Cleaver, we all worked with uh a sense of creativity to try and find answers to these questions and there are more questions uh that we need answers for and it's gonna be a long time for some people before they ever consider selling their home when your current thirty year fixed rate is two point nine percent and that could have a decade long plus problem you know for us so uh I'm glad Mister Pollack that you are still interested in defeasance and I look forward to learning more uh with that I yield back. The chair now recognizes the gentleman from Florida Mister Herodopolis for five minutes.

Well, thank you, Mr. Chairman. Always great to be here and appreciate your patience with me. Sorry. And as far as uh wanted to get into some of the issues um Miss Miss Krattinger, good, good to see you again. Um, how do excessive or poorly tailored regulations translate into fewer loans and higher costs for Main Street businesses and could right-sizing the regulatory framework allow those banks to

Thank you, Congressman. A critically important topic and and always good to see you. So I'd say that the um work that the Congress has been doing and that the regulators have been doing to right-size regulation is making a big difference. I know it's making a big difference in Florida and in your district as our bank members are talking about the opportunity to focus on exactly what their customers need. Um and actually able to to be focused on customer service, on technology, on investments in their operations, as opposed to focus solely on compliance and check the box exercises. Um, some key regulatory changes that were so outdated they were set in the nineteen seventies. Uh, one in particular that I know would resonate too for a community bank, um, in your district is that you, there were limits under Reg O, appropriately so, on uh insider lending, so bank leadership being able to use the products and services that their bank sells. But when they can't actually even have a credit card from their bank, because their lending limit's twenty five hundred dollars, all of their customers are saying, why don't you use the credit card that you actually are trying to sell to me? So, rego changes were were significant in that area too, so a lot of things just don't make sense that are being addressed today, thankfully.

And and getting with your question about banking, what are what are the your customers telling you right now is is the biggest challenge they're facing as they come and and look for a business loan, a home loan, a personal loan? What are they telling you right now?

Yes, uh in terms of the where um the activity is, yeah.

Where the econ yeah, where the where the economy is in their mind and and what we could do to give them some of the good work that our chairman or our sub-chairman today did on affordable housing and otherwise.

Yes. Uh, no, I'd say they're saying again that the um activity is is positive um that generally there's a lot of optimism from their clients and customers coming uh to see them and and they're taking advantage of of the products and services that the banks are offering i think we are excited too about the uh changes when it comes to the digital asset space too and innovation um and in terms of what that can offer to bank customers going forward

Great thank you uh one of the issues that um that i worked on last year was the is green light and growth act it was it is part of the committee's invest act and and making sure that some of those smaller companies have had the ability to move up, whether it be by purchasing uh other companies or not having so much paperwork so they can compete with the bigger companies along the way. Um where do you all see the invest act going in the future? I'm not sure who would answer that best, maybe Lynn?

Um I think um We again applaud the the fact that the Invest Act was addressing a couple of issues that we agree with in markets. Number one, broadening of access um from an investment standpoint to investors of all shapes and sizes, but then also uh paving the way for companies to tap our public markets a lot quicker. Um so we're incredibly optimistic about the principles that are set forth. I can't specifically go into any one provision, but i'd love to talk to you about it more.

Well, Chairman, I first thank you for your time today, and and we are excited that this committee has done some productive work, especially with affordable housing, of course, and the and some of the crypto legislation throughout. And it's it's it's nice to see that those smaller community banks have the ability to compete now with the state which it simply didn't have in the past, because of decisions made by Don Frank and others. And I hope we can continue this trend where we we make this a more competitive field and The way we reduce prices is simply by offering more competitors and with that, Mister Chairman, I appreciate the opportunity to speak today and I yield back.

Gentleman yields back. The chair now recognizes I would like to thank all the witnesses for their testimony today. Without objection, all members will have five legislative days to submit additional written questions for their witnesses to the chair. The questions will be forwarded to the witnesses for their response. Witnesses, please respond no later than October seventh, twenty twenty six.

Uh

I ask unanimous consent to enter into the record several statements we receive outlining major concerns with the Republican bill posted for this hearing, and a new one that would undermine the Consumer Financial Protection Bureau. These statements are from the National Consumer Law Center, the Consumer Federation of America, the NAACP, the Center for Responsible Lending, and more.

Without a break, this hearing is now adjourned. Have a good day.